What is a Business Plan?

 A business plan is a written document prepared by the individual entrepreneur or partners

that describes the goals and objectives of the business along with steps necessary to
achieve those goals.
 It is also referred to as a proposal, a prospectus, or game plan.
What is its Main Function?
 It is to force the entrepreneur to organize his thinking about the feasibility of his business
idea.
 It eliminates seat-of-the-pants organizing.
 It leads to the preparation of a written document by putting down in black and white the
rationale for starting and operating a business.
 It replaces oral statements of faith with documented logic and cold figures.
What are the contents of the business plan?
• Cover Sheet: It mentions the name of the project, address of the headquarters (if any)
and name and address of the promoters.
• Executive Summary: It should briefly describe the company; mention some financial
figures and some salient features of the project.
• The Business: This will give details about the business concept.
• Funding Requirement: Since the investors and financial institutions are one of the key
bodies examining the business plan report and it is one of the primary objectives of
preparing the business plan report, a careful, well-planned funding requirement should be
documented.
• The Product or Services: It includes the key features of the product. It also gives details
about the patents, trademarks, copyrights, franchises, and licensing agreements.
The Plan:-
• Marketing Plan: Marketing mix strategies are to be drawn, based on the market
research.
• Operational Plan: The operational plan would give information about
o Plant location
o Plan for material requirements, inventory management and quality control.
o Finally, the budget for opealso drawnrational plan is.

• Organizational Plan: The organizational plan indicates the pattern of flow of

responsibilities and duties amongst people in the organization, it provides
detailsabout the manpower plan.
 • Financial Plan: The financial plan is usually drawn for two to five years for an
existing company.
• Critical Risks: The investors are interested in knowing the tentative risks to
evaluate the viability of the business and to measure the risks involved in the
business.
• Exit Strategy: The exit strategies would provide details about how the
organization would be dissolved, what would be the share of each stakeholder in
case of winding-up of the organization.
• Appendix: The appendix can provide information about the Curriculum Vitae of
the owners, Ownership Agreement and the like.

What are the Uses of the Business Plan?

 First and foremost, it is a powerful sales document for raising money.
 A second major use of your business plan is an operational plan to direct your
operations
 The third major use of your business plan is pre supposed in the above two, and
entails proving the feasibility of your business idea.
Feasibility planning
A feasibility plan asks two questions of a potential venture
 Will anyone buy the product or service?
 Can it make a profit?
While the questions are straightforward, the answers are anything but. These two simple
questions quickly lead you to a raft of others that you will address in the following sections:
Opportunity or need:- Describe the market opportunity
 Product/Service description:-
 performance (durability, quality of material, defect level)
 Cost (purchase prise, quantity discount, operating cost, repair cost,cost of
instalation e.tc )
 Availability ( carried by local stores, credit terms, quality of service available
from local dealer, delivery time, credit card, on-line transactions, etc. )
 Social (status, image, popularity with friends, popularity with family members,
reputation of brand, style,fashion, etc. )
 Service: hours, warrant, guarantee, return/replacement policy, upgrades,
maintenance, training, installation,repair service, spare parts, customer support,
tech support, training, product design, make to order, level ofinventory,
quotation response time, lead time, quality certification, employee capabilities
  Environment: location, atmosphere, layout, fixtures, aesthetics, style, sound,
lighting, color, etc.

 Target market:- who are the actual and potential buyers

 Unique benefits:- what are the major benefits of the product/service?
 Competitive analysis:- price range, channel of distribution, marketing strategy,strength
and weakness, operation ,company size, finance source
 Risks
 Profitability:- can this venture be profitable? How much investment is required?
 break-even
 Conclusions:- if you conclude that your concept is not feasible, you face two
alternatives: you can scrap the whole idea and get a real job.
 Recommendations:- if you conclude that your concept is feasible, prepare an action plan
of the next steps you will take.
The SWOT analysis
The SWOT analysis is just a shorthand way of looking at you and the business strengths and
weaknesses – and the market environment in which it operates-opportunities and threats.