BUSINESS PLAN
- document that describes the various
external and internal elements involved in
starting a business or in expanding an
existing venture
- Blueprint for business
- Will change over time as it develops
- Useful for forecasting or raising
additional capital for expansion
- Can include straggles to transfer
ownership or dissolution
USERS
USER OF
BUSINESS
PLAN
VALUE
•
Serves as a roadmap.
Entrepreneu •
Identi es the resources.
• Anticipate potential business
r
risks
• Assess Character, Cash ow,
Collateral, Equity
Contribution
Lender
•
Investor
Allows investor to gauge
whether projected returns
are acceptable, as well as
capability of the venture s
management team
’
’
fl
fi
fi
fi
fl
WHY SOME FAIL:
• Document looks unprofessional.
• Executive summary is not coherent/
too long.
• Unclear on its marketing/ production
plan
• Sales and nancial projections are
unreasonably optimistic.
• Inadequate description of the
quali cations and experience of
management team
• Inadequate assessment of the potential
threats
MAJOR SECTIONS
1. Title Page
•Business name and logo
•Names of business owners
2. Executive Summary
•summarizes the business
•short enough for the readers to
understand and conceptualize the entire
concept of the business
3. SWOT Analysis
•Compilation of the business's strengths,
weaknesses, opportunities, and threats
• help organizations develop a full
awareness of all the factors involved in
making a business decision.
4. Description of the business
•Product and/ or services
•Mission, Vision statement and core values
•Location of the business
5. Operations Plan
•Description of the company s operation
(Input-Process-Output)
•machinery and equipment needed and
suppliers of raw materials
•Flow of orders for goods and services
•procedures in completing a transaction
re ected in operations layout
6. Marketing Plan
•Marketing Plan steps
•comparisons of major competitors
•marketing mix strategies (product, place,
promotion, price)
7. Organizational Plan
•Form of ownership
•Principal shareholders, or partners
•Organizational chart/ lines of authority
•Background of the management team
• Roles and responsibilities of the team
8. Financial Plan
•Assumptions
•COGS
•OPEX
•markup and selling price
•income statement
•sources and uses of funds
•Break-even Analysis
SWOT ANALYSIS
- help organizations develop full
awareness of all factors in making a
business decision
Strengths
- factors the company hold expertise in
- Basis for continued success
Weaknesses
- factors that preen meeting mission
- Hamper growth and success
Opportunities
- the environment within which
organization operated
fi
fi
fl
Threats
- factors existing in external environment
that jeopardize pro tability and reliability
- Uncontrollable and are risks to stability or
survival
Internal factors
Strengths (S) and weaknesses (W)
- experience readily available to you
•
•
•
•
•
Financial resources (funding, sources
of income and investment
opportunities)
Physical resources (location, facilities
and equipment)
Human resources (employees,
volunteers and target audiences)
Access to natural resources,
trademarks, patents and copyrights
Current processes (employee
programs, department hierarchies and
software systems)
External factors
- in uence and affect every company,
organization and individual
- opportunity (O) or threat (T)
- External factors are typically things you
or your company do not control, such as
the following:
• Market trends (new products,
technology advancements and shifts in
audience needs)
• Economic trends (local, national and
international nancial trends)
• Funding (donations, legislature and
other sources)
• Demographics
• Relationships with suppliers and
partners
• Political, environmental and economic
regulations
MARKETING PLAN
- organizational function and a set process
for creating, communicating, delivering
value to customers, and managing
customer relationships
How customers decide when purchasing:
1. Recognizing a need or want
- triggered by internal or external stimulus
SEGMENTATION
- divide market into groups of customers
using segmentation practices
- Identify and pro le distinct groups of
buyers who prefer varying product and
service mixes
- examining demographic, psychographic,
behavioral differences among buyers
TARGETING
- determine which customer group to focus
marketing efforts on
POSITIONING
- create product positioning and
marketing mix most likely to appeal to
selected audience
2. Seeking or retrieving information
- search for information to learn about
the competing products and services
and their features
3. Evaluating Choices
- attributes important to buyers beliefs
and attitudes
- Some make rational approach others to
marketing stimuli
4. Making A Purchase
- what brand to buy, where to buy, how
many, when and how to pay for it
fi
fi
fi
5. Assessing the product or service
- consumer assess his experience
- Delighted skim some steps
- satis ed seeks further information
- dissatis ed:1. Exit 2. Voice
MARKETING MIX
4 Ps
1. Product
•
Product Features (serving, size,
number of pieces, color,
temperature)
•
Styles/ Options Available
•
Brand Name
•
Quality of Materials or Components
used
•
Product Bundling
•
Packaging
•
After-sales service/ warranties
offered
•
2. Price
Cost-based Pricing
Competitionbased
Direct labor,
raw materials,
Variable Cost commission, Consider prices of
packaging
existing products
cost
or services in the
market
Fixed
Utilities cost,
(overhead
rent
cost)
3. Place
- address of store
- Advantage disadvantage
- Number of distributor
- Electronic channel use
4. Promotion
- advertising, sale promotion, personal
selling, public relation
- Promotional strategy and budget
PRODUCT LIFE CYCLE
1. Introduction
- investment in advertise
2. Growth
Value-based
The value
attached by
customers to
products or
services
- if product is successful
- Growing demand, increase production,
expansion in availability
3. Maturity
- most pro table stage
- Costs of producing and marketing decline
4. Decline
- increased competition as others emulate
success with enhancement or lower price
- May lose market
EFFECTIVE MARKETING AND TRENDS
1. Satisfying customers needs
•Starts with the recognition and
identi cation of customer needs, wants
and expectations and continuously
monitoring, updating any changes.
•De nes who these customer targets are
•Creates a program to satisfy these needs
fi
’
’
fi
fi
fi
fi
fi
2. Pro tably satisfying organization
•Aims to achieve organizational goals of
pro tability, growth, and sustainability.
•Satisfying company stakeholders
•
3. Superior to competition
•Developing and maintain a competitive
advantage
•Remain relevant and sustainable making
the organization distinctly ef cient in
satisfying customer needs, thus locking
customer s loyalty
PRODUCT ORIENTATION VS MARKET
ORIENTATION
Company
Missouri-Pacific
Railroad
Product
Market
We are a people-andWe run a railroad
goods mover
We make copying We improve office
Xerox
equipment
productivity
Standard Oil
We sell gasoline We supply energy
Columbia Pictures We make movies We entertain people