FACILITATING AND LEARNING MATERIAL FOR
UNIT 1: DEVELOPING BUSINESS PLAN FOR NEW
BUSINESS
NATIONAL CERTIFICATE II
LEARNING OUTCOMES
1
Demonstrate knowledge of business plan (BP) for new business
2
Demonstrate knowledge of business plan preparation for new business
3
Demonstrate knowledge of business plan development for new business
4
Demonstrate knowledge of business plan pitching
1
Table of Contents
UNIT INTRODUCTION ........................................................................................................... 3
ICONS AND THEIR MEANINGS ........................................................................................... 4
LO 1. Demonstrate knowledge of Business Plan (BP) for new business ................................. 5
PC (a) Explain Business Plan ................................................................................................ 5
PC (b) Explain importance of Business Plan ......................................................................... 6
PC (c) Explain types of Business Plan................................................................................... 9
PC (d) Explain target readers of the Business Plan ............................................................. 11
Self-Assessment 1 .................................................................................................................... 13
LO 2. Demonstrate knowledge of Business Plan Preparation for new business ..................... 15
PC (a) Explain critical issues in preparing business plan .................................................... 15
PC (b) Explain elements of business plan ........................................................................... 17
PC (c) State characteristics of effective business plan ........................................................ 23
PC (d) Explain the five Cs of credit ..................................................................................... 23
Self-Assessment 2 .................................................................................................................... 25
LO 3. Demonstrate knowledge of Business Plan development for new business .................. 27
PC (a) Prepare business plan for new business.................................................................... 27
PC (b) Use checklist to determine completeness of business plan ...................................... 58
PC (c) Outline elements of business plan PowerPoint presentation .................................... 59
PC (d) State Challenges of preparing business plan ............................................................ 61
Self-Assessment 3 ................................................................................................................... 62
LO 4. Demonstrate knowledge of Business Plan Pitching new ............................................. 64
PC (a) Explain business plan pitching ................................................................................. 64
PC (b) Explain business plan pitching process. ................................................................... 65
PC (c) Explain Business Pitch Evaluation criteria............................................................... 66
PC (d) Outline Business Pitch PowerPoint items ................................................................ 67
Self-Assessment 3 ................................................................................................................... 68
References ................................................................................................................................ 70
2
UNIT INTRODUCTION
You are welcome once again to this learning material. This material introduces learners to
Development of Business Plan for New Business. This unit draws your attention to the
knowledge of preparing Business Plan and Business Plan Pitching, skills in preparing Business
Plan and Pitching your Business Plan
This learning material has been written to encourage you to work on your own. It’s full of
activities that will help you to work independently and to make decisions concerning how you
will approach a task in this unit. Follow the instructions and the steps indicated in this learning
material and work as independently as possible.
The next page shows the symbols (icons) that will be used frequently in this material. It also
gives the meaning of the icons, so that any time you see the icon, you will understand what it
means. Please feel free to ask your facilitator any questions you have as you read the material.
Have fun and enjoy reading the material!
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ICONS AND THEIR MEANINGS
The meaning of each icon is provided in Table 1. You will come across these icons in the
material, and you should know what each of them represents. Carefully observe the icons and
their meanings.
Table 1: Icons and their meanings
#
1
Icons
Meaning
Learning Outcome
2
Self- Assessment
Congratulations for going through the icons and their
meanings! We will next look at the activities under LO 1.
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LO 1. Demonstrate knowledge of Business Plan (BP) for
new business
This LO is developed to help you acquire knowledge of business plan (BP) for new business,
the importance of business plan, types of business plan, and target readers of the business plan
as per pc’s (a) – (d).
PC (a) Explain Business Plan
Plan is a blueprint for a future
course of action and planning is
deciding in advance what to do in
the future.
As the old adage goes “An hour of
planning can save you 10 hours of
doing.”
Before we start a new business or
expand an existing one, we need to take time to construct a business plan. Such a plan includes
your goals for the business, both short and long-term; a description of the products or services
you will offer; the market opportunities you have anticipated for them; and the resources and
means you will employ to achieve your goals in the face of likely competition.
With this basic understanding, in your own words write what a business plan is.
Well done!
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A business plan is a planning tool that builds on the knowledge and skills gained in the idea
viability assessment; market research; market segmentation; marketing mix and resources in
Cert I.
A business plan is a comprehensive written document that describes what a new business
intends to accomplish and how it intends to accomplish it. It outlines an entrepreneur’s
proposed business venture, its operational and financial details, its marketing
opportunities and strategy, and its managers’ skills and abilities.
The plan serves as an entrepreneur’s road map on the journey toward building a successful
business. A business plan describes which direction the company is taking, what its goals
are, where it wants to be, and how it intends to get there. The plan is written proof that an
entrepreneur has performed the necessary research, has studied the business opportunity
adequately, and is prepared to capitalize on it.
Now that you can explain a business plan, learn the importance of a Business Plan in the Pc (b)
PC (b) Explain importance of Business Plan
A business plan is an
essential tool for
planning, managing, and
growing a business. It
provides a structured
framework for decisionmaking, helps secure
financing, and enhances
the overall chances of
business success.
A business plan is central to how you start, grow, and develop your business. Think of a
business plan as a GPS (Global Positioning System) to get your business going. A good
business plan guides you through each stage of starting and managing your business. You’ll
use your business plan like a GPS for how to structure, run, and grow your new business. It’s
a way to think through and detail all the key elements of how your business will run.
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With the knowledge you have gained in PC(a), state five (5) reasons why an entrepreneur
should write a business plan.
1.
2.
3.
4.
5.
Well done. Give yourself a thumbs up.
Below are the importance of preparing a business plan:
1. It will help you to reach business milestones:
A well-thought-out business plan helps you to step back and think objectively about the key
elements of your business and outlines the strategies and tactics you will use to achieve your
business objectives. These serve as a roadmap, guiding and informing your decision-making
as you move forward.
2. It helps communicate the merits of your venture to investors to get funding:
A well-crafted business plan is an effective communication tool for sharing your business idea
with potential investors, partners, lenders, and employees. This will help you get funding or
bring on new business partners. A business plan demonstrates your commitment and
professionalism.
Let's assume that you have some money and you would like to invest that money. Kofi and
Ama came to you to lend them some money to start their business. Ama came to you with a
comprehensive business plan, and Kofi came without a business plan and made an oral
presentation. Which entrepreneur would you invest in his or her business?
The fact that Ama has a business plan not only provides you with detailed information about
the venture but also suggests that Ama has thought through each element of the business and
is committed. This will help investors feel confident that they will see a return on their
investment.
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3. Clarity of Vision
A business plan forces you to define and articulate your business concept, mission, and longterm goals. It helps you clarify your vision and ensures that all team members are on the same
page.
4. Market Understanding:
Through market research and analysis, a business plan helps you gain a deep understanding of
your target market, industry trends, and competitors. This knowledge is essential for
succeeding in the market.
5. Risk Assessment:
It forces you to identify potential risks and challenges your business might face. By anticipating
these issues, you can develop contingency plans and risk mitigation strategies.
6. Resource Allocation:
A business plan includes financial projections and budgeting. It helps you determine how much
capital you need, allocate resources efficiently, and plan for cash flow management.
7. Accountability:
When you have a business plan in place, you and your team have a documented set of goals
and responsibilities. This promotes accountability and helps everyone stay focused on
achieving the company's objectives.
8. Legal and Regulatory Compliance:
A business plan helps ensure that your business complies with legal and regulatory
requirements, such as permits, licenses, and tax obligations.
9. To Better Understand Your Competition
Creating the business plan forces you to analyze the competition. All companies have
competition in the form of either direct or indirect competitors, and it is critical to understand
your company’s competitive advantages. And if you don’t currently have competitive
advantages, figure out what you must do to gain them.
10. To Better Understand Your Customer
Why do they buy when they buy? Why don’t they when they don’t? An in-depth customer
analysis is essential to an effective business plan and a successful business. Understanding your
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customers will not only allow you to create better products and services for them but will allow
you to more cost-effectively reach them via advertising and promotions
PC (c) Explain types of Business Plan
1.
Full Business Plan
A full business plan is a comprehensive and detailed document that provides a thorough
overview of a business concept, its strategies, market analysis, marketing plan, operations, and
financial projections. It serves as a roadmap for entrepreneurs and business owners, helping
them plan, launch, and manage their businesses effectively. The full business plan is used for
both internal and external purposes. Externally it is used to secure funding and internally serves
as a road map and guides the entrepreneur to systematically think through every aspect of its
new business venture. Typically, a full business plan is about 25-35 pages.
2.
Summary Business Plan
A summary business plan is a concise and condensed version of a full-length business plan. It
is about 10 – 15 pages. It provides a high-level overview of the key components of the business
plan. sometimes potential investors, lenders, or stakeholders, may request a summary of the
business plan.
3. Internal Business Plan
Unlike the traditional business plan which is mostly aimed at the company's external audiences,
an internal business plan is focused on guiding the operations of an existing company. It may
not be intended for external audiences like investors or lenders. The internal business plan is
made to be used within the company. Its main aim is to help management and employees
understand the company's goals, strategies, and tactics for achieving them. This ensures
everyone is on the same page so that decisions can be taken in line with the company’s strategy.
The content of an internal business Plan is similar to the full business plan. It can also be used
for budgeting and resource allocation.
4. Strategic Business Plan
A strategic plan assesses the current environment of a business, both internally and externally.
It establishes future goals and targets and describes the strategies it will implement to reach
them. This type of plan is centred around a company's long-term vision and strategies. It often
covers a longer time horizon, such as 3 to 5 years, and focuses on high-level goals and
objectives. It is used to align the organization, set strategic priorities, and allocate resources
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accordingly. A business plan describes a current business or a specific new project. A strategic
plan talks about how you want to change your company to grow or be ready for the future. For
example, if you are now producing shoes from leather and you would like to produce shoes
with recycled disposable plates, cups and other disposable materials to serve a particular target
and gain a competitive advantage you need to prepare a strategic plan for that. A strategic plan
includes identifying your business strengths and weaknesses, opportunities and threats, and
based on that set long-term goals and objectives to achieve them.
5. Operational Business Plan
Operational plans are shorter-term plans typically covering one year. They are highly detailed
and outline the day-to-day activities and initiatives required to achieve the company's strategic
objectives. These plans are critical for managing the company's daily operations.
6. Expansion or Growth Business Plan
When a company is looking to expand its operations, enter new markets, or introduce new
products or services, it may create an expansion or growth plan. This plan outlines the strategies
and resources required for growth.
7. Nonprofit Business Plan
It is not only profit-making businesses that prepare a business plan, non-profit-making
organisations such as Aid For Girls and Children Foundation, Africa Youth Network, USAID,
and the like also prepare a business plan. Nonprofit organizations use this type of plan to outline
their mission, goals, fundraising strategies, and program development. It helps nonprofit
leaders communicate their vision to stakeholders, donors, and volunteers.
8. Exit Strategy Business Plan /.,KLMRXEZp21`
A business exit strategy is a plan that a founder or owner of a business makes to sell their
company or share in a company, to other investors or other firms. The exit strategy business
plan outlines the steps that a business owner needs to take to generate maximum value from
selling their company
9. Franchise Business Plan
A franchise business plan is a specialized type of business plan created by individuals or entities
who are interested in purchasing and operating a franchise. It outlines the strategy and details
specific to the operation of a franchise unit within an established franchise system. The purpose
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of a franchise business plan is to demonstrate to the franchisor (the parent company) and
potential lenders or investors that the franchisee is well-prepared to successfully operate the
franchise.
PC (d) Explain target readers of the Business Plan
The target readers of a business plan also known as the users of the business plan can vary
depending on the purpose
of the plan and the stage of
the business. The users of
the business plan can be
categorised
into
two;
Insiders also known as
internal
users
and
outsiders also known as
external users. Generally,
a business plan is created
to communicate the vision, strategy, and viability of a business to potential stakeholders. Here
are the primary targets or users of a business plan:
Investors:
An investor is any person or other entity who commits capital with the expectation of receiving
financial returns. Examples are Angel Investors, Venture Capitalists, Banks and Financial
Institutions, and Private Equity Firms. For these readers, the business plan should focus on the
potential return on investment, risk assessment, and financial projections.
Business Partners and Co-Founders:
There are potential partners who would like to join the business with their expertise and
experience, before they do that, they should understand the business's value proposition, market
opportunity, and the potential for a successful partnership.
Employees and Management:
A clearly written business plan, one that articulates a firm’s vision and future,
is important for both the management team and employees. It helps a firm’s employees
operate in sync and move forward in a consistent and purposeful manner.
Customers and Clients:
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Customers especially companies that would want to buy from your business would like to know
whether your business will be in a position to supply them continually. The business plan
instills confidence in potential customers or clients.
Suppliers and Distributors:
Suppliers and distributors may want to know about the business's financial health and growth
potential to assess the risk of doing business with them. The business plan provides them with
information on the company's financial stability and future prospects.
Government and Regulatory Authorities:
Government agencies and regulatory bodies may require business plans for licensing, permits,
or compliance purposes.
Acquirers or Potential Buyers:
If the business is considering an exit strategy involving a sale, acquirers or potential buyers
will want to assess the company's value. The business plan provides them with information on
financial performance, intellectual property, customer base, and market position.
Different stakeholders have varying interests and concerns, so the plan should address their
questions and provide the necessary information to make informed decisions about the
business.
Well, done learner for going through all the learning activities for the PCs in LO1.
Test your understanding with the below assessments
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Self-Assessment 1
This learning outcome (LO) has a little quiz at the end. I recommend you take this
whole quiz without looking back for any of the answers. This will help you determine how well
you have understood this learning outcome. Now assess yourself with the questions below.
1. The businessmen in your community have invited you to speak to them about business
plan. How would you explain Business them
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2. Azik is planning on starting his own business and he is anticipating how to promote his
business ideas to potential investors. Explain to Azik any six (6) importance of preparing
a Business Plan for a new business.
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3. There are different types of business plan that every entrepreneur should know. Explain
any six (6) types of Business Plans
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4. An entrepreneur friend of yours wants to know those who reads the business plan.
Explain to this friend of yours the any five (5) target readers of the Business Plan
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We believe you can now explain the business plan, the
importance of the business plan, the types of business plans,
and the target users of the business plan.
END OF UNIT 1
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LO 2. Demonstrate knowledge of Business Plan
Preparation for new business
This LO is developed to help you acquire knowledge of Business Plan Preparation for a new
business, critical issues in preparing a business plan, the elements of a business plan,
characteristics of an effective business plan, and what lenders and Investors look for in a
business plan as per PC’s (a) – (d).
PC (a) Explain critical issues in preparing business plan
1. The content and basic format of the plan
In preparing a business plan, you have to ensure that the business plan provides sufficient
information. It must be long enough to capture all necessary information, yet short enough to
maintain reader interest. There should be factual support for the concept in the form of strong
supporting evidence such as résumés of the founding entrepreneurs. After a business plan is
completed, it should be reviewed for spelling and grammar, and to make sure that no critical
information has been omitted. The content must be in clear writing that effectively
communicates.
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2. The opportunity
Every business starts with an opportunity. Before you prepare your business plan you have to
make sure that the product or service you are ready to offer is viable. This product or service
should meet a need, fill a gap, and add value to the users. You have to do a feasibility analysis
to ensure your product has a ready and attractive market.
3. Critical resources
Critical resources are resources essential for the business to operate and continue operations to
achieve its mission. They are fundamental in achieving objectives, maintaining operations, and
mitigating risks. They are assets, elements, or factors that are vital for the functioning, success,
and survival of a business. The importance of these resources can vary depending on the
specific context. As an entrepreneur, you should be able to identify these resources for your
business. Typically, these would be financial, physical, and human. You must be clear on the
critical resources you will need to run the business.
4. The entrepreneurial team
An entrepreneurial team is a group of people who come together to start, operate, and grow a
new business venture. These individuals are responsible for conceiving, planning, and
executing the business idea. The composition and dynamics of the entrepreneurial team play a
crucial role in the success of a new business. As an entrepreneur, before you proceed with your
business plan you must be sure your team members complement each other's skills and abilities.
5. The financing structure
Financial structure refers to the mix of debt and equity that a company uses to finance its
operations. This composition directly affects the risk and value of the associated business. The
entrepreneur must decide on the best mixture of debt and equity.
6. Research
A plan should be built on hard evidence and sound research, not guesswork or what an
entrepreneur “thinks” will happen. There should be primary and secondary research. The
sources for all primary and secondary research should be cited.
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PC (b) Explain elements of business plan
A business plan is essential for the
inception, growth, and overall success
of a company. These plans provide a
business with a vision for the future
and a clear strategy for how to expand.
There are several essential elements
of an effective business plan, and
understanding
each
of
these
components can help you create a
business plan that leads your company
toward success. A well-structured business plan typically contains several key elements that
provide a comprehensive overview of your business concept, strategy, and goals. Here are the
essential elements of a business plan:
1. Cover page
A business plan should contain a cover page. The cover page should include the company’s
name, logo, address, email address, and phone number; the date the business plan was prepared;
the contact information for the lead entrepreneur; and the company’s website address if it has
one. The company’s Facebook page and Twitter name can also be included if it has one.
2. Table of Contents
A table of contents should follow the cover page. It should list the sections and page
numbers of the business plan and the appendices. Business plan readers appreciate a table of
contents that includes page numbers so that they can locate the particular sections of the plan
in which they are most interested.
3. Executive Summary
The executive summary is a short overview of the entire business plan; it provides busy readers
with everything t hey need to know about the new business's distinctive nature. An executive
summary is designed to capture readers’ attention and draw them into the plan.
Although the executive summary is the first part of the business plan, it should be written last
to ensure that it captures all of the important points as they appear in the business plan and it
should be concise and not exceed one page.
The executive summary should provide an overview of the business plan on a section-bysection basis.
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After reading the executive summary, anyone should be able to understand the entire business
concept, the attributes that differentiate the company from the competition, and the financing
that is being requested. Investors will read the full business plan only if the executive summary
is sufficiently convincing. It is the most important section of the business plan
4. Industry Analysis
The main body of the business plan should start by describing the industry in which the firm
intends to operate and the level of competition.
This is to acquaint lenders and investors in the industry in which the business will compete. An
industry is a group of companies that are related based on their primary business activities.
For example food and beverage industry, textile industry, and the like. The section should
describe significant industry trends and key success factors as well as an overall outlook for
its future. Key success factors are aspects of an organization's processes that are critical to
determining its success in its industry. For example, customer service, waiting time, product
quality, and the like. Examples of key trends include issues such as whether profit margins in
the industry are increasing or declining and whether input costs are going up or down and
cyclical or seasonal economic trends. The section again should explain the market size and its
growth or decline, and the economic and competitive strength of the major firms in the
industry.
It should explain to investors how easy it is to enter and exit the industry, and the ability to
achieve economies of scale or scope to further help readers evaluate the new business.
Again, you should explain to your readers the structure of the industry and the nature of the
participants in your industry. Such as whether the major participants in the industry are
innovative or conservative and are quick or slow to react to environmental changes.
Furthermore, You should also include your competitors in this section and illustrate how your
business is uniquely different from the established companies in the industry or market. you
should describe the level of competition in the industry and how you will effectively position
your business against key competitors. What are their strengths and weaknesses and how will
you differentiate yourself? You want your reader to visualize how your business will fit in or
see the gap that your business will fill.
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5. Company Description
This section gives a general description of the company. In this section, you demonstrate to
your reader that you know how to translate an idea into a business. You explain the origin of
the business idea for the company and the driving force behind the new business. Include
basic information, such as when your company was founded, the type of business entity it is,
limited liability company, sole proprietorship, or partnership. Provide a summary of your
company’s history to give the readers a solid understanding of its foundation. For example,
Evirofrendly Travelling Bags company is a bag-producing company started by Kofi and Ama,
Cert II students. This bag is made from disposable rubbers 19 to 22 inches and has two parts.
Kofi and Ama’s motivation to design these bags was influenced by their concern for the
disposable rubber bags choking our gutters and water bodies and the expensive imported bags
impacting the value of the Cedi.
After you have described your company, you have to state the mission of the business. A
mission statement defines why a company exists and what it aspires to become. After stating
the mission of the business, you then describe the product or service. You have to describe
your product or service and how your product or service is unique, giving an overview of how
customers will use your product or service, and how you plan to position the product in the
marketplace. A product or service’s position is how it is situated relative to its rivals.
Depending on your product or service, you might have to use drawings, diagrams, and
illustrations in describing your product especially if the product is highly technical. For
example, you should explain how your bags differ from the already existing bags, and how you
will sell them either directly to your customers or through middlemen or e-selling. Here you
should use the results of your feasibility analysis. You should include a summary of any
patents, trademarks, or copyrights that protect the product or service from infringement by
competitors.
6. Market Analysis
In this section, clearly define who your target customers are, where you will find customers,
how you will reach them, and, most importantly, how you will deliver your product or service
to them. Provide a detailed analysis of your potential customers and how your business
provides a solution for them.
This section describes the specific market segment and target market within the industry, on
which the business will focus. Market segmentation is the process of dividing the market into
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distinct segments. Such as by geography (regions), demographics (age, gender, income),
psychographics (personality, lifestyle, values), and so forth. For example, the target market for
the bio-friendly bags are university students. You have to demonstrate to the readers of your
business plan that you know about your consumers and that your product or service is produced
to meet their needs. You need to prove to the readers of your business plan that a viable market
exists for your products or services. Entrepreneurs must be able to prove that their target
customers actually need or want their goods or services and are willing to pay for them.
7. The Economics of the Business
In this section, you have to explain to your audience how you are going to make profit and how
many units of your product or service must be sold for the business to “break-even” and then
start earning a profit. Explain the gross margin. The gross margin for revenue is the selling
price minus the cost of goods sold.
8. Marketing Plan
The marketing plan focuses on how the business will market and sell its product or service in
other words, how you plan to enter the market and gain a competitive edge.
You have to explain the uniqueness of your product from the existing ones. A key component
of this section is defining what makes your product unique in the eyes of your customers. You
have to also explain your product, pricing, promotion, and distribution strategies.
9. Design and Development Plan
If your product or service is completely new, it might go through developmental stages. For
example, if you are producing solar fridges, you need to describe the present stage of the
development. Do you have a prototype, or it is still at the conception stage? Remember
sometimes you might funding for the prototype. You should describe in this section specifically
the point that your product or service is at and provide a timeline that describes the remaining
steps.
10. Operations Plan
The operations plan section of the business plan outlines how your business will be run and
how your product or service will be produced. You have to construct an organizational chart
identifying the business’s key positions and the people who occupy them. Explain the
geographic location and its benefits, list your most important facilities and equipment, and
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briefly describe how they will be (or have been) acquired, in terms of whether they will be
purchased, leased, or acquired through some other means, space requirements, inventory
management, staffing plans, and accounting processes and policies. Explain whether you will
be producing a product or you will outsource your production. For manufacturing companies,
all processing details are spelled out in the operational plan section.
For startups, you have to divide the operational plan into two distinct phases: the developmental
plan and the production plan:
Developmental plan: The developmental plan details each step in the process of bringing your
product or service to market. You want to outline the risks and the protocols you’re taking to
demonstrate to investors that you’ve examined all potential liabilities and that your business is
well-positioned for success. For instance, if workers (or your products) are exposed to toxic
materials during the production process, in your developmental plan, you want to list the safety
measures you will follow to minimize the risk of illness and injury to workers and consumers
and how you plan to minimize any potential culpability to your business.
Production plan: The production plan includes the day-to-day operation information, such as
your business hours, the work site(s), company assets, equipment pieces, raw materials and any
special requirements.
11. Management Team and Company Structure
This section should illustrate how your business is organized. It should list key members of the
management team, the founders/owners, board members, advisors etc.
As you list each individual, provide a summary of their experience and their role within your
company. Investors and other readers of the business plan would like to assess the strength of
the management team and whether they have the expertise and competencies to execute the
business idea. The management team of a new business typically consists of the founder or
founders and key management personnel. This section should give a brief profile of each
management team member. Each profile should include the following information:

Title of the position

Duties and responsibilities of the position

Previous industry and related experience

Previous successes

Educational background
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Although they should be kept brief, the profiles should illustrate why each individual is
qualified and will uniquely contribute to the firm’s success. The complete résumés of key
management team personnel can be placed in an appendix to the business plan.
12. Overall Schedule.
Investors would like to know whether the management team is aware of what needs to take
place to launch the venture and has a plan in place to get there. This section should show the
major events required to launch the business. When the business will be registered if it has not
been registered, a date for the completion of the prototype, rental of facilities, obtaining critical
financing, starting the production of operations, obtaining the first sale, and so forth.
13. Financial Projections
This section is the final section of the business plan. It provides the projected financial
statement of the business. It is also known as a pro forma financial statement. You must clearly
state how much money you will need for the business, where the money will come from, and
how the money will be used. The financial projection section should include the pro forma
income statement, the pro forma statement of financial position also known as the balance
sheet, and the pro forma cash flow statement for a three-year period, break-even analysis, and
assumptions on which the financial statement is based. Examples of assumptions on which the
financial statements are based are inflation, interest rate, and the state of the economy because
these will affect your sales projections. The break-even point is the point at which your
company’s sales totals cover all of its expenses. Investors want to know your revenue
requirements to assess whether your business can pay returns on their investment. Make sure
this section is precise and accurate.
Appendices
There are certain materials that do not easily fit into the body of a business plan so you attach
them as an appendix. Examples are résumés of the top management team, photos or diagrams
of product or product prototypes, certain financial data, and market research projections.
Well done!!
We have come to the end of Pc (d).
22
PC (c) State characteristics of effective business plan
The business plan should meet the below characteristics.
i.
The business plan should not be just an idea, it should be an opportunity with real
potential.
ii.
The product or service must be viable and add significant value to the customer.
iii.
It should depict a clear result from the feasibility analysis
iv.
The plan should prove that the business is entering an exciting, growing industry
v.
The plan should prove that the business has a well-defined target market.
vi.
The business plan should explain the point of differentiation that separates the
business from its competitors.
vii.
The business should have a sound marketing plan
viii.
The plan should show that the management team is experienced, skilled, and up to the
task of launching the new business
ix.
The business plan should show a sound operation plan appropriate.
x.
The financial projections should be complete and should be based on realistic
assumptions
PC (d) Explain the five Cs of credit
To successfully use business plans to attract capital, entrepreneurs must be aware of the criteria
lenders and investors use to evaluate the creditworthiness of businesses seeking financing.
Lenders and investors refer to these criteria as the five Cs of credit:
capital, capacity, collateral, character, and conditions.
1. CAPITAL: before any lender will grant a loan, they would want to satisfy themselves
that your business has a stable capital base. Investors also want to make sure
entrepreneurs have invested enough of their own money into the business.
2. CAPACITY: Capacity refers to cash flows. Lenders and investors must be convinced
of your business's ability to meet its regular financial obligations and to repay back the
loan and returns on their investment.
3. COLLATERAL: Collateral includes any assets an entrepreneur pledges to a lender as
security for repayment of the loan. If an entrepreneur defaults on the loan, the lender
has the right to sell the collateral and use the proceeds to satisfy the loan.
4. CHARACTER: Before putting money into a small business, lenders and investors
would want to satisfy themselves that the entrepreneur has character. They want to be
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sure the entrepreneur is honest, competent, determined, knowledgeable, and
experienced. Lenders and investors know that most small businesses fail because of
poor management, and they try to avoid extending loans to high-risk entrepreneurs.
Preparing a solid business plan and a polished presentation can go far in convincing
potential lenders and investors of an entrepreneur’s ability to manage a company
successfully.
5. CONDITIONS: lenders and investors consider factors relating to the business
operation such as potential growth in the market, competition, location, form of
ownership, the overall economy, interest rate levels, the inflation rate, demand, and loan
purpose. This relevant information should be provided in an organized format in the
business plan.
6. The higher a small business scores on these five Cs, the greater its chance of receiving
a loan or an investment.
As an entrepreneur, you should keep this in mind when preparing your business plans.
Well done! learner for going through all the learning activities for the PCs in LO2.
24
Self-Assessment 2
This learning outcome (LO) has a little quiz at the end. I recommend you take this
whole quiz without looking back for any of the answers. This is meant to help you determine
how well you have understood this learning outcome. Now assess yourself with the questions
below.
1. Kofi is in process of preparing Business plan and would like to know the critical issues he
should consider. Explain the critical issues in preparing a business plan to Kofi
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2. A well-structured business plan contains several key elements. Briefly Explain the
element of a business plan
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3. An effective business plan must be clear, concise, and well-organized. State any five (5)
characteristics of effective business plan
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4. Lenders and investors have criteria for evaluating the creditworthiness of businesses
seeking financing. Explain the five Cs of credit
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We believe that you can now explain the critical issues in
preparing a business plan, characteristics and elements of a
business plan and what investors look for in a business plan
END OF UNIT 2
26
LO 3. Demonstrate knowledge of Business Plan
development for new business
This LO is developed to help you acquire skills in Business Plan Preparation for a new business,
prepare a business, use a checklist to determine the completeness of a business plan, challenges
of business plan preparation, and the challenges of preparing a business plan as per PC’s (a) –
(d).
PC (a) Prepare business plan for new business
Welcome to Pc (a). In this PC, building
on the knowledge you have gained in
LOs 1 and 2, you will identify an idea
and prepare a business plan for your idea
using the template provided for each
element.
This will be fun and you will enjoy it.
Let's get started.
Select a business idea from your trade
area, and use the below samples and template to prepare a business plan.
Cover page
Sample Cover page
Choose a name for your company
GhanaFruity Naturals
Give an address to your company
P.O Box AI1I, Central
Tel: 1212121212, Email: fn@gmail.com
Use the above sample and the below template to prepare the cover page of the business plan
for your new business
Choose a name for your company
Give an address to your company
Well done! Move on to the next section which is the executive summary
27
Executive Summary
Sample Executive Summary
What will your business
GhanaFruity Naturals is a start-up located in the central region,
do?
It will offer a variety of natural, freshly-made juices from
mango, pineapple and oranges.
What will your business
GhanaFruity Naturals will be the the number one natural drink
be like in five years to
producer in Ghana controlling 80% of the market share
come?
What is your product?
The products to be offered by GhanaFruity Naturals are:
100 ml, 200 ml bottled mango juice
100 ml, 200 ml paper bottled pineapple juice
100 ml, 200 ml paper bottled orange juice
What benefit does your
GhanaFruity Naturals Has health benefit for its customers. The
business offer customers? vitamins and minerals in the natural fruits will keep our
customers healthy, younger and maintain an active lifestyle
How is your product
GhanaFruity Naturals is different from all the drinks available
different from other
in the market. It contains 100% natural fruits with no additives
companies that provide
and preservatives. Its environmentally friendly by using paper
similar products?
bottling
Who are your customers?
Children, Adult men and women
How will you reach your
GhanaFruity Naturals will sell its product directly to its
customers?
customers through Telemarketing, e-commerce and indirectly
through supermarkets
What is the experience of
GhanaFruity Naturals is solely owned and operated by Ama.
those who will run the
Ama holds certificate in biochemistry and degree in food and
business?
nutrition. She has worked with Bluejuice company, a
beverage-producing company for 15 years. She works in
conjunction with Kofi Jeo, Ato Job, Sheila Nas, Mark Sal, Aku
Shika, and Mohammed Abu. Kofi Jeo, has expertise in
beverage production, with formal education in fruit juice
production management and 13 years of relevant industry
experience. Ato Job has a degree in quality control
28
management and extensive knowledge of quality control
methodologies with 10 years of industrial experience. Sheila
Nas has a degree with 11 years of industrial experience in
supply chain management, procurement, and vendor relations.
Mark Sal, has a degree and 10 years of industrial experience in
marketing, sales, and brand management experience in the
beverage industry, logistics, distribution networks, and supply
chain management. Aku Shika is a chartered accountant with
15 years of industrial experience in management, finance, and
accounting to ensure compliance with tax regulations,
acquiring permits, and budgeting for cash flow purposes.
Mohammed Abu has a degree and 10 years of experience in
HR management with knowledge of relevant labor laws,
How much money will
GhanaFruity Naturals is seeking ₵165,000 in debt financing to
you need to start the
open its start-up natural drinks. The funding will be used to
business?
buy, equipment and rent factory space, working capital, six
months’ worth of payroll expenses and opening inventory.
Use the above sample and the below template to prepare executive summary of the business
plan for your new business
What will your business
do?
What will your business
be like in five years to
come?
What is your product?
What benefit does your
business offer customers?
How is your product
different from other
companies that provide
similar products?
29
Who are your customers?
How will you reach your
customers?
What is the experience of
those who will run the
business?
How much money will
you need to start the
business?
Well done! Move on to the next section which is the industry analysis.
Industry Analysis
Sample Industry Analysis
What industry will the
GhanaFruity Naturals operate in the beverage industry in
business operate in?
Ghana.
Is it big, small, or
It’s a big and growing industry. Revenue in the industry is
medium?
expected to show an annual growth rate of 14.82%, resulting
in a projected market volume of US$24.61m by 2027. This
gives a bright prospect for GhanaFruity Naturals
What are the key success
Key success factors in the industry include product quality,
factors in the industry?
Product packaging, effective distribution channel, customer
service, strong partnerships with suppliers, competitive
pricing, product innovation, brand awareness, and customer
loyalty.
Who are your competitors
GhanaFruity Naturals will be competing with Ekumfi Fruits
& Juice Ltd, Kalyppo, Coca- Cola Bottling Company Ghana,
PepsiCo's franchise bottler, SBC Beverages and imported
drinks on the local market Ghana. Our analysis of competitors
reveals that while there are several players in the beverage
industry in Ghana, few have successfully combined health30
conscious, and sustainable elements. Ghana Fruity Naturals
aims to fill this gap by providing a unique product range that
appeals to our target customers' preferences and values.
How will your operation
GhanaFruity Naturals offers several advantages over its
be better than your
competition. Those advantages are:
competitors?
i. Fresh drinks made with locally sourced fruits found in
central region.
ii. Affordable prices.
iii. Environmentally friendly paper packaging.
iv. It is not carbonated
vi. Np preservatives and additives
vii. Food and wellness education are held on social media for
free.
Viii. Easy access to our product
ix. Customer focused
Use the above sample and the below template to prepare industry analysis section of the
business plan for your new business
What industry will the
business operate in?
Is it big, small, or
medium?
What are the key success
factors in the industry?
Who are your competitors
How will your operation
be better than your
competitors?
Well done! Move on to the next section which is the Company Description.
31
Company Description
Sample Company Description
What is the business
GhanaFruity Naturals is a business yet to be registered as a
form?
sole proprietorship manufacturing company
What products will you
GhanaFruity Naturals will produce mango drinks, pineapple
be selling?
drinks and orange drinks from natural pineapple, mango and
oranges. The drinks will be paper bottled in 100mls and
200mls
Why will customers buy
A survey conducted on the target customers during the
from you?
feasibility analysis indicated that the target customers
prioritize health and wellness, seeking beverages that are
natural, low in sugar, and provide functional benefits.
Our product meet these needs and our product will be cheaper
than existing product.
We will provide high value for our customers at a lower cost.
Who will be your
Children, adult men and women and these customers want to
customers?
stay healthy and vibrant
Why will you be
The beverage industry has a great potential for growth and
successful in this
what drives success in this industry are product quality,
business?
Product packaging, effective distribution channel, customer
service, strong partnerships with suppliers, competitive
pricing, product innovation, brand awareness, and customer
loyalty. The company offers quality differentiated drinks,
well packaged with effective Telemarketing, and e-commerce
What is special about this
The company believes in quality. Hence, the company’s
business?
drinks are made of original fruit extracts no additives and
preservatives.
What is the business
The business will be located at Ekumbra, central region.
location?
32
Why is this a good
The business is located close to its raw material so the
location for your
company can have access to fresh fruits and at a cheaper
business?
price. This will lead to the production of quality fresh natural
drinks at a lower price.
Use the above sample and the below template to prepare the company description section of
the business plan for your new business
What is the business
form?
What products will you
be selling?
Why will customers buy
from you?
Who will be your
customers?
Why will you be
successful in this
business?
What is special about this
business?
What is the business
location?
Why is this a good
location for your business?
Well done! Move on to the next section which is the market analysis.
33
Market Analysis
Sample Marketing Analysis
Who are the purchasers of
People most likely to buy our products are Children, adult
your products (gender,
men and women between the ages of 6- 60 years.
age, behaviour, lifestyle,
Customer behaviour:
personality, income level
Understanding the behavior of our target customers is crucial
etc.)
for GhanaFruity Naturals to develop effective marketing
strategies and product offerings.
i. Purchase Behaviour: These consumers are willing to pay a
premium for products that align with their values, such as
health and sustainability. They are early adopters of new
beverages. Convenience and availability are significant
factors influencing their purchase decisions.
ii. Consumption Behavior: Health-conscious consumers will
incorporate our drinks into their daily routines, as a
replacement for sugary or unhealthy drinks. They may
consume our drinks in schools, homes, whiles driving,
exercising social gatherings and are likely to share their
experiences on social media.
iii. Brand Loyalty: Building brand loyalty is essential.
Engaging in eco-friendly practices, transparent labeling, and
community involvement can foster loyalty among our target
audience.
Income Level:
Our target customers' income levels are typically middle to
upper-middle class. This is based on their willingness to
spend more on health-conscious, and sustainable products.
The exact income levels may vary by region, GhanaFruity
Naturals will aim to make our products accessible and
affordable to a broader customer base.
Lifestyle:
34
Understanding the lifestyles of our target customers is key to
tailoring our marketing strategies and product development.
i. Active and Health-Oriented Lifestyle: Our target customers
prioritize health and a balanced diet. They are likely to seek
out drinks that provide energy and nutrition without
compromising health.
ii. Eco-Conscious Lifestyle: our target customers are
concerned about the environment. They prefer products with
sustainable packaging, ethical sourcing, and a minimal
ecological footprint.
iii. Social and Digital Lifestyle: These consumers are highly
engaged in the digital and social world. Leveraging social
media and digital marketing will be crucial to reach and
engage with them effectively.
What is the size of the
The beverage market in Ghana is worth ¢3.85 billion. The
market? Is it growing?
beverage market keeps expanding and is expected to grow
rapidly year-on-year. The beverage market is expected to
grow by 11%.
How will you increase
GhanaFruity Naturals will capture a 5% market share within
your market share?
the first year and establish GhanaFruity Naturals as a
premium, health-oriented beverage brand.
GhanaFruity Naturals will increase its market share by
developing and launching new and innovative drinks that
cater to the needs of its target customers. Ensure consistent
high-quality products.
Invest in brand building to create a strong and recognizable
brand identity. This includes logo design, packaging, and
messaging that resonates with the target customers. Invest in
targeted marketing campaigns using social media, and
traditional advertising. Use environmentally friendly
packaging and sourcing practices. Engage in social
35
responsibility initiatives and community involvement to build
trust and a positive brand image. Offer competitive pricing
strategies that take into account the purchasing power of our
target customers and the pricing strategies of competitors.
Are there segments of
i. Health-Conscious Consumers are increasingly seeking
users who are under-
beverages that are low in sugar, and free from artificial
served by competitors?
additives, the existing beverage companies are not meeting
these needs
ii. Consumers who are environmentally conscious prefer
beverages with sustainable packaging. Most of the beverages are
packaged in plastic bottles creating environmental challenges.
iii. As the Ghanaian population ages, there is a potential
market for beverages that address the specific health needs of
older consumers.
iv. Parents are often looking for healthier, lower-sugar
alternatives for their children.
Do any of these under-
The above underserved needs create opportunity for
served segments present
GhanaFruity Naturals to develop and market products that
opportunities?
meet these demands, such as natural fruit juices, provide
drinks with kid-friendly packaging that appeal to parents'
concerns for their children's health and adopt eco-friendly
practices, promoting sustainability in its products and
operations.
Use the above sample and the below template to prepare the market analysis section of the
business plan for your new business
Who are the purchasers of
your products (gender,
age, behaviour, lifestyle,
personality, income level,
etc.)
36
What is the size of the
market? Is it growing?
How will you increase
your market share?
Are there segments of
users who are underserved by competitors?
Do any of these underserved segments present
opportunities?
Well done! Move on to the next section which is the economics of the business.
The Economics of the Business
Sample Economics of the Business
How will you
Revenue will be generated from direct sale of our products to our
generate revenue
target customers, through various channels, including online sales,
social media, e-commerce platforms, food festivals, and pop-up
events to showcase and sell our products. Establish partnerships
with retailers such as grocery stores, convenience stores, and
specialty food shops to distribute our products on their shelves.
Supply our drinks to restaurants, cafes, bars, and hotels. Create
subscription models where customers can receive regular
deliveries of our beverages. Develop an online store and sell our
drinks to our target customers nationwide. Offer customization or
private labeling services for corporate clients, events such as
wedding, funerals, naming ceremony, landmark birthday and the
likes, or businesses.
37
What are the start-up
Total start-up cost for GhanaFruity Naturals is ₵215,000
costs?
What is the total
GhanaFruity Naturals is seeking ₵165,000 in debt financing
investment required?
How will the loan or
The funding will be used to buy, equipment and rent factory
investment be used?
space, working capital, six months’ worth of payroll expenses,
and opening inventory.
How will the loan or
The loan will make GhanaFruity Naturals more profitable by
investment make the
providing the necessary capital to start the business, support
business more
growth, scale operations, and seize opportunities.
profitable?
When will the loan be Yearly payments will be made in five installments
repaid?
Use the above sample and the below template to prepare the economics of business section of
the business plan for your new business
How will you
generate revenue
What are the start-up
costs?
What is the total
investment required?
How will the loan or
investment be used?
How will the loan or
investment make the
business more
profitable?
38
When will the loan be
repaid?
Well done! Move on to the next section which is the marketing plan.
Marketing Plan
Sample Marketing Plan
Who are your Target
GhanaFruity Naturals is targeting children, adult men and women
Markets?
between the ages of 6- 60 years.
How will products be
The products to be offered by GhanaFruity Naturals are packaged
packaged?
in 100 ml and 200 ml paper bottle and a handle for convenience.
What image will you
GhanaFruity Naturals will emphasize quality, great taste, position
try to develop or
its product as a healthier alternative to traditional options, and
reinforce?
commitment to sustainability
What will be your
GhanaFruity Naturals will use penetration pricing to enter the
pricing strategies?
market, then position the product as a premium, healthy product.
(For example:
Premium, Skimming,
penetration etc.)
Why will customers
GhanaFruity Naturals offers healthier, tasty quality natural fruit
pay the price you are
drinks as an alternative to traditional drinks with no additives and
charging for your
preservatives,
product?
How will you
The price of our product will relatively be lower than that of our
compare with
competitors
competitors in terms
of pricing?
39
How will competitors
Competitors might want to reduce the prices because they are
respond to your
enjoying economies of scale but GhanaFruity Naturals is meeting
pricing strategy?
the needs of customers by offering a healthier, tasty quality
natural fruit drinks. A need that competitors have not been able to
meet.
Will you compete on
GhanaFruity Naturals offers will compete on quality, differentiate
quality or price?
its product from the existing products.
What will be your
GhanaFruity Naturals will sell on a cash basis
credit policies?
How will you
GhanaFruity Naturals will utilize a mix of distribution channels,
distribute your
including direct-to-consumer sales, retail partnerships, and online
product?
sales.
How will you
Branding: Develop a strong brand identity that conveys health,
promote your
freshness, and taste.
product?
Advertising: Utilize traditional advertising methods, such as social
media, FM, Television etc.
Content Marketing: Create videos, and other content highlighting
the health benefits of the product
Partnerships: Collaborate with fitness trainers, nutritionists, and
health workers.
Sales Team: train a sales team to approach retailers and
restaurants for distribution.
Online Sales: Develop a user-friendly e-commerce website to
facilitate online sales.
Customer Relationship Management (CRM): Implement a CRM
system to track customer interactions and feedback.
packaging, or new production techniques. Innovation can help
capture consumer interest and loyalty.
40
Use the above sample and the below template to prepare the marketing plan section of the
business plan for your new business
Who are your Target
Markets?
How will products be
packaged?
What image will you
try to develop or
reinforce?
What will be your
pricing strategies?
(For example:
Premium, Skimming,
penetration etc.)
Why will customers
pay the price you are
charging for your
product?
How will you
compare with
competitors in terms
of pricing?
How will competitors
respond to your
pricing strategy?
Will you compete on
quality or price?
What will be your
credit policies?
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How will you
distribute your
product?
How will you
promote your
product?
Well done! Move on to the next section which is the design and development plan
Design and Development Plan
Sample Design and Development Plan
Describe the present
GhanaFruity Naturals has passed the conceptualization stage,
stage of the
identified its target market, conduct thorough market research to
development
understand the target customers, competitors, and market trends.
of your product
(conception,
a prototype of the product has been produced. Recipe has been
prototype, initial
formulated, and tested. the taste, texture, and other characteristics
development, or full
meet the desired standards. Branded paper bottle packaging has
development)
been created and logos and labels has been designed. All
regulatory requirement has been complied with to ensure that our
product complies with all relevant food and beverage regulations,
including labeling, health, and safety standards.
Provide a timeline
Month 1-2: Production Setup
that describes the
Secure contracts with ingredients and packaging suppliers.
remaining steps
Set up a production facility, including equipment acquisition and
setup.
Establish quality control measures and protocols.
Month 3-4: Product Testing and Quality Control
Conduct rigorous testing of the product, focusing on taste,
consistency, and safety. Implement quality control procedures and
training for production staff.
42
Month 5-6: Marketing and Sales Strategy
Finalize pricing strategy based on production costs and market
research and develop marketing campaigns, including social
media, advertising, and promotions. Establish distribution
channels and agreements with retailers and distributors.
Month 7: Testing and Feedback
Organize focus groups or consumer taste tests for final product
feedback. Analyze test results and make necessary product
adjustments.
Month 8: Production Scaling
Begin small-scale production runs for inventory buildup.
Continuously monitor and adapt production processes for
efficiency.
Month 9: Pre-Launch Marketing
Start pre-launch marketing and promotional activities.
Prepare marketing materials and online presence for the product.
Month 10: Final Regulatory Approvals
Ensure all regulatory approvals are in place.
Month 11: Launch Preparation
Finalize agreements with distribution partners and retailers and set
launch date and plan launch events or promotions.
Month 12: Launch and Distribution
Officially launch the drink in the market and distribute to retail
location and e-commerce channels. Monitor initial sales and
customer feedback.
Month 13-18: Monitoring and Adaptation
Continuously monitor sales and customer feedback.
Make any necessary adjustments to marketing, production, or the
product itself based on data and consumer responses.
Month 18-24: Expansion
Explore opportunities to expand into new markets, introduce new
variants, or expand distribution.
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Use the above sample and the below template to prepare the design and development plan
section of the business plan for your new business
Describe the present
stage of the
development
of your product
(conception,
prototype, initial
development, or full
development)
Provide a timeline
that describes the
remaining steps
Well done! Move on to the next section which is the operation plan
Operations Plan
Sample Operation Plan
What are the functional
GhanaFruity Naturals will have Production department, Quality
areas of the business?
Control department, Procurement department, Sales Marketing,
and Distribution department, Finance and Accounting
department and Human Resource Department
Who will be
Production: Kofi Jeo is the manager of the production
responsible for each
department. He is responsible for overseeing the manufacturing
functional area?
and production processes to ensure consistent quality and taste.
Experience: Expertise in beverage production, with formal
education and relevant industry experience.
Quality Control: Ato Job is the Quality Control Manager
responsible for maintaining product quality, taste, and adherence
to industry standards.
Experience: Extensive knowledge of quality control
methodologies.
44
Procurement: Sheila Nas is the procurement Manager
responsible for sourcing and managing the supply of raw
materials and ingredients.
Experience: Supply chain management, procurement, and
vendor relations expertise.
Sales, Marketing, and Distribution: Mark Sal is the manager
of the sales, marketing, and distribution department. He is
responsible for promoting and selling the drinks, building brand
awareness, transporting products to customers and outlets, and
logistics
Experience: Marketing, sales, and brand management
experience in the beverage industry, knowledge of logistics,
distribution networks, and supply chain management.
Finance and Accounting: Aku Shika is the Chief Financial
Officer and Accountant responsible for managing the company's
finances, budgeting, and financial reporting.
Experience: Accounting and financial management experience.
Human Resources (HR): Mohammed Abu is the HR Manager
responsible for hiring, training, and managing the workforce.
Experience: HR management experience with knowledge of
relevant labor laws.
Who reports to whom?
Kofi Jeo, Ato Job, Sheila Nas, Mark Sal, Aku Shika and
Mohammed Abu are level managers
How will your products
Fruit Preparation: Fruits are cleaned, peeled, and processed into
be produced?
juice.
(Describe
Pasteurization: The juice is heated to kill microorganisms.
manufacturing
Clarification: Solid particles are removed from the juice.
processes, technology
Filling and Packaging: The clarified juice is filled into paper
that will be used, and
bottles, sealed, and labeled.
key supplier
Quality Control: Testing for taste and quality is conducted.
relationships.)
GhanaFruity Naturals will establish a strong relationships with:Fruit Growers and Farms: Establish relationships with growers
and farms to source fresh fruits.
45
Equipment Suppliers: Partner with suppliers of juicing,
pasteurization, and filtration equipment.
Cold Storage Providers: Secure cold storage and refrigerated
transportation services to maintain the freshness of fruits and
ingredients.
Sustainable Packaging Suppliers: Collaborate with suppliers of
sustainable packaging materials to align with eco-friendly
practices.
Recycling and Waste Management Services: Partner with
companies that can assist with waste management and recycling
programs.
What are the staff needs In addition to the level managers, GhanaFruity Naturals will
now? In the future?
need 5 skilled and 10 unskilled staff. Future expansion will
require double the current staff need
What skills must they
2 of the skilled staff should have experience and degree in
have? What training
biochemistry and food and nutrition, one should have
will you provide?
experience and degree in marketing and sales, one should have
degree and experience in finance and accounting and the last
one should have degree and experience in HR. The 10 unskilled
staff should be SSS leavers. All the staff will be trained on the
job
Are the people you
The job market has the the needed staff
need available?
What will be the levels
Salaries will be competitive to maintain and attract the needed
of salaries?
skills. The minimum wage requirement will be complied with.
Salaries will range from ₵500 to ₵1500 depending on the level
and the job requirement
Use the above sample and the below template to prepare the operation plan section of the
business plan for your new business
46
What are the functional
areas of the business?
Who will be responsible
for each functional
area?
Who reports to whom?
How will your products
be produced? (Describe
manufacturing
processes, technology
that will be used, and
key supplier
relationships.)
What are the staff needs
now? In the future?
What skills must they
have? What training
will you provide?
Are the people you need
available?
What will be the levels
of salaries?
Well done! Move on to the next section which is the management team
47
Management Team
Sample Management Team
Who are the team
GhanaFruity Naturals is solely owned and operated by Ama.
members?
Ama holds certificate in biochemistry and degree in food and
nutrition. She has worked with Bluejuice company, a beverage
producing company for 15 years. She works in conjunction with
Kofi Jeo, Ato Job, Sheila Nas, Mark Sal, Aku Shika and
Mohammed Abu. Kofi Jeo, has expertise in beverage
production, with formal education in fruit juice production
management and 13 years of relevant industry experience. Ato
Job has a degree in quality control management and extensive
knowledge of quality control methodologies with 10 years of
industrial experience. Sheila Nas has a degree with 11 years of
industrial experience in supply chain management, procurement,
and vendor relations. Mark Sal, has a degree and 10 years of
industrial experience in marketing, sales, and brand
management experience in the beverage industry, logistics,
distribution networks, and supply chain management. Aku
Shika is a chartered accountant with 15 years of industrial
experience in management, finance, and accounting to ensure
compliance with tax regulations, acquiring permits, and
budgeting for cash flow purposes. Mohammed Abu has a degree
and 10 years of experience in HR management with knowledge
of relevant labor laws,
What are their duties
Ama oversees the whole management and operations of the
and responsibilities?
business. Kofi Jeo is in charge of production of the product, Ato
Job is in charge of product quality, Sheila Nas is in charge of
procurement of raw materials and ingredients, Mark Sal is in
charge of the sales, marketing, and distribution, Aku Shika
responsible for managing the company's finances, budgeting,
and financial reporting, and Mohammed Abu is responsible for
hiring, training, and managing the workforce.
48
What is their previous
Kofi Jeo worked with Ekumfi Juice company for 8 years and
industry and related
Kallypo for 5 years both in their production department as the
experience?
production manager. Ato Job has worked with coca cola quality
department for 10 years, Sheila Nas has worked with Nestle as
head of procurement for 6 years and Unilever for 5 years in the
same capacity. Mark Sal has worked with Coca cola as
marketing manager for 10 years. Aku Shika has worked with
financial institutions as accountant for five years and Ekumfi
Juice as chief accountant for 10 years. Mohammed is a retired
HR manager of pepsi.
State their positions
Ama is the managing director, Kofi is the production manager,
Ato is the quality control manager, Sheila is the procurement
manager, Mark is the marketing, sales, and distribution
manager, Aku is the finance and accounts manager and
Mohammed is the HR manager.
What is their
Ama holds CERT II
educational
Kofi holds a BSC in production management
background?
Ato holds a BBA in quality management
Sheila holds a BBA in procurement management
Mark holds a BBA in marketing
Aku holds a BSC in accounting and is a member of ICAG
Mohammed holds a BBA in HR and chartered HR
Use the above sample and the below template to prepare the management team section of the
business plan for your new business
Who are the team
members?
What are their duties
and responsibilities?
What is their previous
industry and related
experience?
49
State their positions
What is their
educational
background?
Well done! Move on to the next section which is the overall schedule
Overall Schedule.
Sample Overall Schedule
When will you acquire
Month 1-2: Set up a production facility, including equipment
the premises and other
acquisition and setup.
resources?
When will you
Month 3: Develop and test beverage recipes and fine-tune taste
complete a prototype?
and ingredients
When will get license
Month 4-10: Register the business and acquire permits and
to operate
licenses
When will you start
Month 8: Start manufacturing
manufacturing
When will you obtain
Month 1: obtain financing
financing?
When will you obtain
Month 12: Obtain our first sales
your first sales?
Use the above sample and the below template to prepare the overall schedule section of the
business plan for your new business
When will you acquire
the premises and other
resources?
When will you
complete a prototype?
50
When will get license to
operate
When will you start
manufacturing
When will you obtain
financing?
When will you obtain
your first sales?
Well done! Move on to the next section which is financial projections
Financial Projections
1. List all fixed assets you will need to start and operate your business. Use the sample and
template below to describe your fixed assets
See a Sample below
FIXED ASSETS DESCRIPTION
COST (₵)
Land
20,000.00
Building (lease)
25,000.00
Equipment
120,000.00
Vehicles
-
Renovations on lease
20,000.00
185,000
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COST (₵)
FIXED ASSETS DESCRIPTION
Land
Building (lease)
Equipment
Vehicles
Renovations on lease
2. Outline all the expenses you will need to start and operate your business
See a sample below
START -UP EXPENSE DESCRIPTION
COST (₵)
Business registration
2,000
Patent
3,000
Inventory
10,000
Initial Advertisement and Promotion
10,000
Admin and distribution
5,000
25,000.00
Total Fixed Assets and Star-up Expenses ……215,0000………
START -UP EXPENSE DESCRIPTION
COST (₵)
Business registration
Patent
Inventory
Initial Advertisement and Promotion
Admin and distribution
52
Total Fixed Assets and Star-up Expenses ……….………
3. Prepare a unit selling price and cost analysis
See a sample below
UNIT SELLING PRICE AND COST ANALYSIS 200ml
Unit Selling Price and Cost Analysis
₵ 6.00
(A) Selling Price
Less Cost of Producing a unit of your product
₵
Direct materials
2
Direct labour
1
Direct expenses
0.50
Manufacturing overheads
1.50
(B) Total cost per unit
4.50
(C) Unit Gross Proft (A) – (B)
1.50
Gross profit % (C) divided by (A) = 1.50/6.00
25%
UNIT SELLING PRICE AND COST ANALYSIS
Unit Selling Price and Cost Analysis
₵
(A) Selling Price
Less Cost of Producing a unit of your
₵
product
Direct materials
Direct labour
Direct expenses
Manufacturing overheads
(B) Total cost per unit
(C) Unit Gross Proft (A) – (B)
Gross profit % (C) divided by (A)
53
4. Prepare a 6 month projected income statement.
State assumptions for preparing the income statement statement
See a sample below
Sample Projected Income Statement for 6 Months Beginning ………………………..
Month
Month
Month
Month
Month
Month
1
2
3
4
5
6
₵
₵
₵
₵
₵
₵
Unit Selling Price (P)
6.00
6.00
6.00
6.00
6.00
6.00
Units sold (Q)
200
210
231
277
333
399
(A) Total Revenue ( P x Q )
1,200.00 1,260.00 1,386.00 1,662.00 1,998.00 2,394.00
(B) Cost of Goods Sold (4.50 x Q)
900.00
945.00
1,039.50 1,246.50 1,498.50 1,795.50
(C) Gross Profit (A-B)
300.00
315.00
346.50
415.50
499.50
598.50
Administrative expenses
60.00
70.00
80.00
90.00
100.00
110.00
Selling and distribution expenses
150.00
110.00
120.00
140.00
150.00
160.00
Insurance
30.00
30.00
30.00
30.00
30.00
30.00
Net Profit before tax (C-D)
60.00
105.00
116.50
155.50
219.50
29.50
(D) Other indirect expenses:
ASSUMPTIONS
i.
GhanaFruity Naturals assumes that it can sell 200 units of the 200 ml drinks in month
1 and sales will increase by 5% in month 2, 10% in month 3 and 20% in months 4 to 6
ii.
Unit Selling price is ₵6
iii.
Unit cost is 4.50
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Projected Income Statement for 6 Months Beginning ………………………..
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6
₵
₵
₵
₵
₵
₵
(A) Total Revenue
(B) Cost of Goods Sold
(C) Gross Profit (A-B)
(D) Other indirect expenses:
Administrative expenses
Selling and distribution expenses
Insurance
Depreciation
Net Profit before tax (C-D)
5. Use the below sample and template to prepare the sources of funds and uses
Sample Sources of Funds and Uses
Sources:
Equity:
Self-Equity
₵50,000.00
Outside Equity
Debts
₵165,000.00
Loans from Bank
₵85,000.00
Loan from friends
₵50,000.00
Loan from relatives
₵30,000.00
Others:
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Total Sources (Funds)
₵215,000.00
Uses:
Purchase Land
₵20,000.00
Building
₵25,000.00
Equipment
₵120,000.00
Renovations
₵20,000.00
Inventory
₵10,000.00
Working capital
₵20,000.00
Total uses
₵215,000.00
Sources of Funds and Uses
Sources:
Equity:
Self-Equity
Outside Equity
Debts
Loans from Bank
Loan from friends
Loan from relatives
Others:
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Total Sources (Funds)
Uses:
Purchase Land
Building
Equipment
Innovations
Inventory
Working capital
Total uses
57
PC (b) Use checklist to determine completeness of business plan
Well done, you can now prepare
a
business
plan
for
your
business. Remember you have
to meet the requirements of
your readers so you can get
what you need from them. After
you
have
prepared
your
business plan, use the below
checklist
to
determine
the
accuracy of the business plan, if
you answer NO, you have to go back to your business plan and work on it.
YES
NO
Is the business idea an opportunity with real market potential?
Is the product or service feasible?
Does the product or service add value to the customer?
Is the industry exciting, or growing?
Have you identified an attractive position within the industry?
Does the business have a well-defined target market?
Does the business have points of differentiation that truly separate it
from its competitors?
Does the business have a sound marketing plan?
Is the management team experienced, skilled, and up to the task of
launching the new firm?
Is the business’s operations plan appropriate and sound?
Are the assumptions that the firm is basing its financial projections on
realistic?
Are the financial projections completed correctly, and do they project a
bright future for the firm?
58
PC (c) Outline elements of business plan PowerPoint presentation
In this PC, you will know the elements you must cover when preparing PowerPoint
slides for business plan presentations. Outlined below are the elements to be covered
in PowerPoint presentation slides.
i.
Introduction
ii.
Cover page
iii.
Executive Summary
iv.
Industry Analysis
v.
Company Description
vi.
Market Analysis
vii.
Marketing Plan
viii.
Operations Plan
ix.
Management Team
Use the below checklist as a guide to ensure that your business plan presentations
cover all the essential elements.
Introduction
Your name
Brief introduction of the Business Idea
Cover page
Name of the business
Address of the business
Executive Summary
Problem your idea is solving
How your product is different from what is already in the market
Target Market
How you will reach your customers
How do you see your business in three years
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Industry Analysis
Name the industry of your business
Name your competitors
How will you compete in the industry?
Company Description
Form of business
Name of the product or service
Location of the business
Why the location
Market Analysis
Who your customers are
Strength of your competitors
Weakness of your competitors
How you will compete with them
Marketing Plan
How will you package your product
Pricing Strategy
Promotion and Advertising Plan
Distribution Channels
Operations Plan
Functional areas of your business
Who will be responsible for each functional area
How your product will be produced
Skill you will need
Management Team
Your Management Team
The experience and competence of the team
The role of each team member
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In ten (10) minutes present your business plan to the class. The presentation delivery should
be clear and concise. Present with confidence and enthusiasm and stay within the allotted
time.
Get Feedback from your peers and facilitator.
Good job!
PC (d) State Challenges of preparing business plan
Writing a business plan is difficult but needful. It is good to know the challenges of writing a
business plan so you can overcome them. Below are the challenges of preparing a business
plan.
1. Getting started- it is a great challenge getting started because you sometimes don’t
know where to start from
2. Getting all the information about your business
3. Identifying cash flow and financial projections - It is difficult to project figures on a
brand-new business
4. Knowing your target market – knowing the right target market can be challenging
5. Being concise- summarising the elements of the business plan to keep it short and
straight to the point can be challenging
6. Making it interesting – it is difficult to tell your story in such a way that people will
buy into your idea
7. Being realistic about business growth – entrepreneurs are optimistic and might
overstate growth
8. Proving that your idea is worth it - being able to express your idea and prospects for
growth
9. creating a business plan that can actually be successfully implemented
61
Self-Assessment 3
This learning outcome (LO) has a little quiz at the end. I recommend you take this
whole quiz without looking back for any of the answers. This will help you determine how well
you have understood this learning outcome. Now assess yourself with the questions below.
1. Imagine you are an entrepreneur planning to start a new business. Outline the key
components you would include in preparing your business plan
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2. To ensure the completeness of a business plan, you use a checklist as a guide. Outline the
items you would include in a checklist to determine the completeness of a business plan.
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3. You have been asked to present your business plan to your classmates. Outline any five (5)
elements you will cover in your PowerPoint presentation slides
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4. Preparing a business plan comes with some challenges, state five (5) challenges of preparing
a business plan.
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We believe that you have gained a skill in preparing a
business plan.
END OF UNIT 3
63
LO 4. Demonstrate knowledge of Business Plan Pitching
new
This LO is developed to help you acquire skills in Business Plan Pitching as per PC’s
(a) – (d).
PC (a) Explain business plan pitching
A pitch is verbally presenting a version of your business plan that is meant for potential
investors.
Business
plan
pitching is the process of
presenting your business plan
to potential investors, lenders,
partners,
or
other
stakeholders with the aim of
persuading them to support or
invest in your business. A
successful business plan pitch should effectively communicate your business idea, its
feasibility, and its potential for growth and profitability. For example, you may pitch your
startup business to potential investors or your products to potential customers. A business pitch
needs to give your audience a clear understanding of your plan or goals to gain the approval of
your investors. To do this, you must gather and share relevant research or provide a compelling
vision. When you pitch effectively, you can motivate and persuade your audience to follow
your idea and make it a reality. A pitch typically takes a short time for the entrepreneur or group
of entrepreneurs to present or describe their ideas to prospective investors. There are other
forms of business pitches namely:
i.
Sales pitch: A sales pitch is the shortest, most basic type of pitch. It is a brief message
that outlines your business plan to attract your audience's attention. The goal is to make
the audience invest in your business. Because the sales pitch is a short message, it is
also known as the "Elevator pitch" because the presentation should last as long as an
elevator ride. Imagine you are in an elevator with the richest man in Ghana, in one
minute or less, how do you convince him to invest in your company?
ii.
Pitch deck: A pitch deck is a slide presentation that outlines your business plan to
potential investors.
iii.
Video pitch: This is done via a short video rather than in person.
64
PC (b) Explain business plan pitching process.
1. Know Your Audience: Understand who your audience is and what they are looking
for in an investment or partnership. Tailor your pitch to address their specific interests
and concerns.
2. Develop a Compelling Story: Craft a narrative that engages your audience and
conveys the problem your business solves, your solution, and why it matters. Highlight
what sets your business apart from competitors.
3. Elevator Pitch: Start with a concise and attention-grabbing elevator pitch that sums up
your business in a sentence or two. This should arouse interest and encourage your
audience to want to learn more.
4. Presentation Materials: Create a visually appealing pitch deck or presentation that
complements your verbal pitch. Include slides that cover key aspects of your business
plan, such as market analysis, product/service details, financial projections, and team
profiles.
5. Structured Presentation: Structure your pitch into clear sections, including an
introduction, problem statement, solution, market opportunity, business model,
marketing and sales strategy, financial projections, and ask (what you're seeking from
investors).
6. Market Opportunity: Emphasize the market size, growth potential, and target
audience. Explain how your business addresses a significant need or gap in the market.
65
7. Economics of Business: Describe how you will generate revenue, pricing strategy, and
sales channels. Highlight any competitive advantages, such as intellectual property or
proprietary technology.
8. Financial Projections: Present a concise overview of your financial projections,
including revenue, expenses, profit margins, and cash flow. Be prepared to discuss your
assumptions and growth strategies.
9. Team and Expertise: Introduce your team members and their relevant skills and
experience. Convey why your team is well-equipped to execute the business plan
successfully.
10. Address Questions and Objections: Anticipate and be prepared to address potential
questions or objections from your audience. Show that you've considered and mitigated
risks.
11. Practice and Rehearse: Practice your pitch multiple times to ensure you can deliver it
confidently and within the allotted time.
A successful business plan pitch not only conveys the details of your business plan but also
showcases your confidence, passion, and ability to execute the plan. It's essential to be wellprepared, clear, and persuasive in your presentation to increase your chances of securing the
support or investment you need for your business.
PC (c) Explain Business Pitch Evaluation criteria
Investors have criteria for evaluating
business plan pitches. Remember you
are not the only entrepreneur seeking
their attention to invest in your
business other entrepreneurs are
doing the same. It is therefore
important
to
know
the
criteria
investors use to assess various aspects
of the pitch to make an informed decision. Listed below are some key evaluation criteria used
by investors, lenders, or potential partners to evaluate business plans:
1. Clarity and Communication: investors consider how effectively the entrepreneur
communicated the business concept, value proposition, and market opportunity.
66
2. Market Opportunity: investors consider whether there is a clear and substantial
market need or opportunity for the product or service.
3. Problem-Solution Fit: investors will look at the specific problem the business is
addressing and how well the proposed solution solves this problem.
4. Profitability: investors consider evidence of potential profitability
5. Competitive Advantage: Investors will look at what sets your business apart from
competitors.
6. Team and Expertise: investors will assess whether the team possesses the necessary
passion, skill, and experience to execute the business plan successfully
7. Financial Projections: investors will assess whether the financial projections are
realistic
8. Risks and Mitigations: whether potential risks and challenges have been identified and
addressed.
9. Legal and Compliance: investors will assess the level of compliance with all relevant
laws and regulations
PC (d) Outline Business Pitch PowerPoint items
As an entrepreneur, you should be able to present your business idea to investors and convince
them to invest in your Business. Outline below are the items to cover in a PowerPoint
presentation slide.
1. Your product/service and your ability to deliver it.
2. The problem your product/service is solving
3. The target market
3. The experience of the team to carry out the business
4. The growth potential of the business
5. Revenue and pricing strategy
6. Financial projections
7. How much funds do you need from the investor
8. How the fund will be used
67
Self-Assessment 3
This learning outcome (LO) has a little quiz at the end. I recommend you take this
whole quiz without looking back for any of the answers. This will help you determine how well
you have understood this learning outcome. Now assess yourself with the questions below.
1. An entrepreneur has developed a comprehensive business plan for his startup venture and is
preparing to pitch the business to potential investors. Explain business plan pitching to this
entrepreneurs
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2. You are an upcoming entrepreneur preparing to pitch your business plan to potential
investors. Explain the business plan pitching process
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3.. As an experienced investor participating in a startup pitch event, you are tasked with
evaluating several business pitches from diverse industries. State any five (5) crteria factors
you would use to assess and rank these pitches.
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4. You have a chance to meet a potential investor in your school. Outline any five (5) items
that your PowerPoint presentation slides should cover.
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We believe that you can now explain Business Plan
pitching and its process and present your business
plan to investors to gain funds
END OF UNIT 4
69
References
1. Barringer, B. R., and Ireland, R. D. (2012). Entrepreneurship, 4th ed., United State of
America: Pearson Educational Limited.
2. Bessant, J. and Tidd, J. (2015). Innovation and Entrepreneurship, 3rd ed., United
Kingdom: John Wiley & Sons Ltd
3. Buame, S. (2012) Entrepreneurship, Big Mikes Publication Ltd.
4. Scarborough, N.M. & Cornwall, J.R. (2016). Essentials of Entrepreneurship and Small
Business Management, 8th ed., U. S. A.: Pearson Educational Limited.
5. Szycher, M. (2019). Practical Handbook of entrepreneurship and innovation, United
States of America: Taylor & Francis Group, LLC
6. https://chat.openai.com/
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