MODULE 2

Market Research
Market research refers to the process through which a firm engages its resources (or hires
someone) to collect and analyze data about its customers, competitors and other factors which
might impact its ability to satisfy customers.

Reasons/ Benefits for a Market Research

• Gain insight on the demand for the product.

• Gain insight on the challenges during the entrepreneurial process or sales.
• Allows the entrepreneur to develop strategies for creating and controlling demand.
• Learn about competitors: shares, strengths and weaknesses.
• Allows projecting of sales and distribution
• Lenders and Investors are more likely to support decisions and forecasts that are supported
or backed by proper research. This research produces more valid and accurate
projections, creating a safe investing environment.

Conducting a Market Research

1. Define the problem: What is the issue or opportunity you want to explore?

2. Develop a Research Plan: Consider the types of sources of information and the best
techniques for gathering info.

3. Implement the Plan: Conduct the research within the resource constraints.

4. Analyze and Interpret the Data: Examine the data received and present the perspective
gained.

Key Elements in the Market Research

These is the information that is needed to make decisions and satisfy customers and should be
collected by the market research.

• Product Characteristics

It must be clear what product features and characteristics are valued by potential
customers.

• Definition of market
 The size and nature of the market set the parameters within which the firm will operate.
It’s important to determine whether the product has mass or niche appeal.

• Expected sale trends.

Understanding the spending patterns and factors affecting the demand of the product can
help improve accuracy of forecasts and planning.

• Customer Analysis

Entrepreneur must know who the customer is. They should have a customer profile. This
assists with developing marketing campaigns, reduces wastage of resources and
maximizes the marketing plan.

• Promotional Strategies

This includes learning about where the customers find information about products and
how they make decisions. It helps with deciding how, when and where to promote the
product.

• Nature and level of Competition

Competitors may already be present in the market, therefore the entrepreneur must
observe and become knowledgeable of competitors. They must determine what influence
they have in the market and the impact it may have on the firm.

Cost-Benefit Analysis
This refers to the identifying and comparing of the costs and benefits of a particular market
research project.
It helps the entrepreneur determine whether the potential benefits of the research outweigh the
costs required.
Importance:
• Informed decision making
• Resource management
• Risk Mitigation
• Continuous Improvement (compare to last market research)
• Justification and Accountability
 Feasibility Analysis
“Feasibility Analysis is a structured and systematic analysis of the various aspects of the
proposed entrepreneurial venture designed to determines its workability”- Coulter 2003

It includes uncovering the strengths and weaknesses of the proposed business as well as the
threads and opportunities present in the environment and the resources needed to be successful.

Benefits of a Feasibility Analysis

• Gives realistic insight on what is required for success.

• Identifies the chances of success.
• Provides the chance to improve the odds of success.
• Being more prepared to face investors or lenders.

Key Elements of a Feasibility Analysis

i. Personality Feasibility (A SWOT profile)

SWOT analysis is an acronym for strengths, weaknesses, opportunities and threats

and is a structure planning method that evaluates those elements in an organization,
project, venture or entrepreneur. It involves specifying the objectives of that venture
and identifying the internal or external factors that are favourable or unfavourable for
that factor. Strengths and weaknesses focus on the venture while opportunities and
threats focus on the environment.

ii. Management Feasibility

Its essential to have a good team at the core of a venture and not just the individual.
This would allow for the entrepreneur to make up for the deficits in his experience of
skill set. The team members should have strengths that compensate for his or her
weakness.

iii. Operational Feasibility

The operation would require a location, staffing, machinery, equipment, etc. It also
includes creating value added products. The entrepreneur must determine how
practical and how efficient these plans and systems are.

iv. Financial Feasibility

Evaluation of the business idea must include careful considerations of the financials
such as demonstrating the source, size and growth of expected profits or the source,
 type and timing of capital. It’s important to show that the needs of the business are
anticipated and the capital and cashflow are adequate.

v. Marketing Feasibility

This is similar to the marketing plan and would evaluate the likelihood of success of
the marketing efforts in the business.

vi. Time Feasibility

The analysis should demonstrate that tasks and processes that lead to the startup can
be completed in a specific time required.

vii. Industry Feasibility

Assessing the industry of the business is crucial. The characteristics of the industry
and the firms that make it up are factors that could affect the success and
sustainability of the business.

viii. Cultural Feasibility

This focuses on how the proposed venture could affect the local culture or be affected
by the local culture.

Market Research vs Feasibility Analysis

Though both tools are used in the screening process of the business, they are very different. The
market research is more focused while the feasibility analysis is far more general. The market
research looks specifically at the firm’s product and its ability to compete. The feasibility study
also considers this but goes way beyond the market and evaluates the proposed business son a
whole.
 Sources of Funding
1. Personal Savings / Investments: The entrepreneur’s own savings, assets or investments
or contributions from family and friends

2. Equity Financing: The sale of an ownership interests (shares in the business) to raise
funds for business purposes.

3. Debt Financing: Funds borrowed by a firm for working capital or capital expenditures
by selling bons, bills or notes to an individual or institutional investors.

4. Angel Funding: High-net-worth individuals investing their own time and money in a
new business with the goal of profiting from their long-term growth. Angels are in it to
give back and offer wisdom and guidance to the entrepreneur.

5. Venture Capitals: Firms that fund promising start up or early-stage businesses. They
tend to finance costly, high-risk, high-return technology based innovative firms. The
funds are used to develop the business’s ideas to the stage where their commercial
potential is sufficiently proven and then the VCs sell its equity in the company to another
party.

6. Grants: Funds provided by a person, organization or public body that does not need to be
paid back. These are great for niche businesses, but the proposals take a while to put
together, there can be quite a lot of competition and the money has to be used for a
specific purpose. You’ll rarely find that grants alone are sufficient to fund a business.

7. Crowd Funding: The accumulation of funds from various individuals/ Raising money
by collecting donations through family, friends, strangers, businesses etc.

8. Gifts

9. Bequest: A personal property given by will.

 Steps in the Accounting Cycle
The primary purpose of accounting is to provide a means of recording, reporting, summarizing
and interpreting economic data. An accounting information system provides data to help decision
makers both outside and inside the business. Accounting is divided into two categories:
• Financial Accounting for those outside
• Managerial Accounting for those inside

Managerial Accounting
This refers to the processes and procedures implemented for internal decision making and
reporting within an organization. This information is often produced monthly.

Financial Accounting
This refers to the fundamental guidelines, policies, procedures and regulations mandated by the
General Accepted Accounting Principles (GAAP) and is designed to satisfy the needs of external
users such as owners and prospective owners, customers, the government, creditors ad lenders,
employees and the general public. This information is produced annually.

The Accounting Cycle

In Financial Accounting, past events and transactions have been chronologically
recorded on a quarterly or yearly basis. This is done using a process known as the
accounting cycle. The accounting cycle is used to develop the financial records of
a business in stages o an ongoing basis. The stages are:
1. Collection and classification of all documents
2. Recording of the key details in the books of original entry (Journal)
3. Posting of the information shown in the books of entry to the Ledger
4. Using the Trial balance to check that the accounting records posted are
arithmetically correct.
5. Summarizing the financial information yearly in the form of financial
statements such as the Statement of Comprehensive Income, Statement of
Financial Position (Balance Sheet) and Statement of Cash Flow.
 Financial Statements
Transactions are business activities entrepreneurs may incur on a daily basis. They are usually
classified, recorded (on a daily basis) and reported (quarterly/annually) as financial statements.
Each transaction indicates that an item of value was exchanged for another item of value.

Financial statements are written reports which describe a venture’s financial position,
performance and cash flows. The statements most commonly used are Statement of
Comprehensive Income (Income Statements), Statement of Financial Position (Balance
Sheet) and Statement of Cash Flow. The statements are usually prepared in this order as some
of the information flows from one statement to the next.

Statement of Comprehensive Income

This statement records all of a business’s revenues and expensive for a period of time. It shows if
the firm is making a profit or experiencing a loss. Most statements are prepared in a particularly
yearly format and includes accounts such as revenue, cost of sales, selling expenses and
administrative expenses.
Accounts Used
• Service Revenue or Sales Revenue: Firm obtains revenue each time a business sells a
product or performs a service.

• Investment Income: From interest received and dividends received.

• Cost of sales: This section reveals the cost of merchandise sold during an accounting
period.

• Selling Expenses: Expenses resulting from activities such as selling, delivering and
displaying a product or service

• Administrative Expenses: Associated with running the firm such as salaries, telephone
bills, electricity bills.

• Taxes: Payments required by local government based on a business’s profit.

 Company X
Statement of Comprehensive Income for the year ended …XXXX
•
$ $

Gross Sales XXX

Less Sales return (XX)
Net Sales XX
Less Cost of Goods Sold:
Opening Inventory X
Purchases XX
Cost of Goods Available for Sale XX
Less Closing Inventory (X)
Cost of Goods Sold (opening stock + purchases - closing stock) X
Gross Profit (Net Sales - Cost of goods sold) X

Operating Expenses:
Expense 1 X
Expense 2 X
Expense 3 X
Total expenses
Income before Tax (Gross profit- total expenses) XX
Tax (find the given percentage of your income before tax) XX
Income after Tax (X)
XX

Steps to Prepare a Comprehensive Income Statement

1. Title and Heading

o Write "Statement of Comprehensive Income."
o Include the company name and the date.
2. Calculate Net Sales
o Record Gross Sales (left side).
o Subtract Sales Return (right side) to get Net Sales.
3. Calculate Cost of Goods Sold (COGS)
o Opening Inventory: Enter on the left side.
o Add Purchases: Enter on the left side.
o Cost of Goods Available for Sale: Sum of opening inventory and purchases (left
side).
o Less: Closing Inventory: Enter on the right side to subtract from goods available
for sale.
 o Total COGS: Difference between goods available for sale and closing inventory
(left side).
4. Calculate Gross Profit
o Subtract COGS from Net Sales (left side).
5. Record Operating Expenses
o List each expense (e.g., Expense 1, Expense 2, Expense 3) on the left side.
o Total Operating Expenses: Sum of all operating expenses (left side).
6. Calculate Income before Tax
o Subtract total operating expenses from gross profit (left side).
7. Calculate Income Tax
o Find the given percentage of income before tax (right side).
o Income after Tax: Subtract tax from income before tax (left side).
 Statement of Financial Position
The statement of financial position shows the firm’s assets, liabilities and owners’ equity. It
provides an entrepreneur with an estimate of its financial position on a being given. Assets and
Liabilities are divided into categories:

ASSETS

• Current: Cash and Items that can be easily converted to cash. Accounts receivable,
inventories and marketable securities

• Fixed: Assets owned (used) over a longer period and that provide economic benefits to a
firm for more than one year in the future. Land, buildings, motor vehicles, equipment,
furniture and long term investments.

• Other: Miscellaneous assets of value that aren’t seen. Patents, copyrights and trademarks.
These can be classified as fixed.

LIABILITIES

• Current: Obligations that are payable within one year. These include accounts payable,
accrued (outstanding expenses) and the current portion of a long term debt.

• Long Term: These include notes or loans that are repayable after one year or more. They
include purchase of land and equipment.

• Owner’s Equity (Capital): This is the equity invested in the business by its owners, plus
the profit retained by the business.

Note= Assets + Liability + Equity. Capital = Assets – Liability.

Company X
Statement of Financial Position as at ,,,,,,,,X

$ $

ASSETS
Fixed Assets
asset 1 XXX
asset 2 XX
Total Fixed Assets XXX
 Current Assets
asset 1
asset 2 XXX
Total Current Assets XX XXX
TOTAL ASSETS XXX

EQUITIES AND LIABILITIES

Owner’s equity
Capital XXX

Long Term Liabilities

Liability 1
XXX
Current Liabilities
Liability 1
XXX
Total Liabilities XXX
TOTAL EQUITIES & LIABILITIES XXX

Steps to Prepare a Balance Sheet

1. Title and Heading

• Write "Statement of Financial Position."
• Include the company name and the date.

2. List Fixed Assets

• Include items like asset 1 and asset 2.
• Calculate the total of these fixed assets.

3. List Current Assets

• Include items like asset 1 and asset 2.
• Calculate the total of these current assets.

4. Calculate Total Assets

• Sum the total fixed assets and total current assets.

5. List Owner's Equity

• Include the capital amount.

6. List Long-Term Liabilities

• Include items like liability 1.
• Calculate the total of these long-term liabilities.
7. List Current Liabilities
• Include items like liability 1.
• Calculate the total of these current liabilities.

8. Calculate Total Liabilities

• Sum the long-term liabilities and current liabilities.

9. Check Total Equities and Liabilities

• Ensure the sum of owner's equity and total liabilities equals the total assets.
 Statement of Cash Flow
Cash Flow statements summarize an entrepreneurial venture’s cash position for a specified
period (including details). It assesses and reveals how

• Much cash is on and

• The cash was acquired.
• Much cash was spent.

Cash Flow statements when prepared are divided into three separate activities as mandated by
the relevant standards. They are shown in this order:

1. Operating
2. Investing
3. Financing

1. Operating Activities

• Definition: Activities related to the core business operations that generate revenue and
incur expenses; Day to day business operations
• Sources of Cash: Sales revenue, interest received, dividends received.
• Uses of Cash: Payments to suppliers, operating expenses, interest paid, taxes paid.

2. Investing Activities

• Definition: Activities related to the acquisition and disposal of long-term assets and
investments; Buying and selling long term assets
• Sources of Cash: Sale of fixed assets, sale of investments, loan repayments received.
• Uses of Cash: Purchase of fixed assets, purchase of investments, loans given.

3. Financing Activities

• Definition: Activities that result in changes to the size and composition of the equity and
borrowings of the company; Changes from borrowing money or selling stock
• Sources of Cash: Issuance of shares, borrowings, owner contributions.
• Uses of Cash: Repayment of loans, dividends paid, share repurchase.
 Company X CASH FLOW STATEMENT
FOR THE PERIOD ENDING XXXX
$ $

Cash flow from operating activities XXX

Receipts from …. (X)
Payment to ………. XX
Net cash flow from operating activities XXX

Cash flows from investing activities (X) XX

Receipts from…..
Payment to acquire ………
Net Cash flow from investing activities XXX
(X)
Cash flow from financing activities XXX
Receipts from…..
Payment to acquire ………
Net cash flow from financing activities

Net increase/decrease in cash (NOTE- add the net cash flow balances from XXX
operating, investing, financing activities together to get this figure. If the figure
is positive it is referred to as an increase, If it is negative it is referred to as a XX
decrease)
XX
Cash at beginning of the year

Cash as end of the year (add the net increase/decrease in cash to the cash at
the beginning of the year)

Steps to Preparing a Cash Flow Statement

1. Title and Heading

• Write "Cash Flow Statement."

• Include the company name and the period ending date.

2. Cash Flow from Operating Activities

• Receipts from operating activities: Enter the total receipts.

• Payments for operating activities: Enter the total payments in parentheses.
• Net Cash Flow from Operating Activities: Subtract payments from receipts.
3. Cash Flow from Investing Activities

• Receipts from investing activities: Enter the total receipts.

• Payments to acquire investments: Enter the total payments in parentheses.
• Net Cash Flow from Investing Activities: Subtract payments from receipts.

4. Cash Flow from Financing Activities

• Receipts from financing activities: Enter the total receipts.

• Payments for financing activities: Enter the total payments in parentheses.
• Net Cash Flow from Financing Activities: Subtract payments from receipts.

5. Net Increase/Decrease in Cash

• Add the net cash flows from operating, investing, and financing activities.
• If the result is positive, it's a net increase in cash; if negative, it's a net decrease.

6. Cash at Beginning of the Year

• Enter the cash amount at the beginning of the year.

7. Cash at End of the Year

• Add the net increase/decrease in cash to the cash at the beginning of the year to get the
cash at the end of the year.
 Break Even Analysis

Break- even analysis is commonly used to assess expected product profitability it shows how
many units should be sold to break even at a particular date. In addition, it can also show when
an entrepreneurial venture is poorly planned, especially for startup decisions. The break- even
analysis reveals the minimum volume of sales required to stay in business in the long run.

Break Even Point

The break-even point is when a business’s sales revenue equals its total expenses, meaning no
profit or loss.

• Fixed Expenses: Costs that stay the same no matter how many units are produced.
• Variable Expenses: Costs that increase with the number of units produced, like direct
materials and direct labor.

At the break-even point:

• Sales revenue = Total expenses (fixed + variable)

• The business covers all its costs but doesn’t make a profit.

Steps for computing the break-even point.

1. Forecast the expenses to incur (this can be determined by estimating sales, cost of
goods sold and expenses for the period)

2. Categorize the expenses from step one in fixed expenses and variable costs.

3. Calculate the ratio of variable expenses to net sales.

4. Compute the break- even point.

Total Fixed Costs

Contribution Per Unit (Selling Price Less Total Variable Costs Per Unit)
 Saving and Investment Options
Savings refers to income not spent or deferred consumption. It involves reducing expenditures
and specified low-risk preservation of money.

Investment is any income not used for immediate consumption and usually results in acquiring
an asset The asset is expected to either generate income or appreciate in value so it can be sold at
a higher price.

Saving Accounts: These are deposit accounts that earn interest on the balance held in the
account. They provide a safe and liquid place to store money but typically earn lower interest
rates compared to other investment options.

Certificates of Deposit/ Fixed Deposits: These are deposit accounts that pay a fixed interest rate
for a set period of time (eg: 3 months, 6 months , 1 year). They offer higher interest rates than
regular saving accounts but the money is locked in for the duration of the term.

Mutual Funds: These pool money from many investors and invest in a diversified portfolio of
stocks, bonds or other securities. They are managed by professional fund managers and offer an
easy way for investors to access a range of investments.

Stocks and Bonds: Stocks represent ownership shares in a company and investors can bug or
sell stocks on stock exchanges. Bonds are debt instruments where investors lend money to
entities in exchange for regular interest payments.

Treasury Bills: These are short term debt instruments issued by governments, typically with
maturities (date where payment is due) of 1 year or less

Real Estate: Investments can include residential or commercial properties, land, etc and can
provide rental income and potential capital appreciation

Annuities: Financial products that provide a stream of guaranteed payments, either for a set
period or for life. They can provide a reliable source in retirement but have complex fee
structures and restrictions
 The Business Model Canvas
The Business Model Canvas is a strategic management and entrepreneurial tool that helps
entrepreneurs and businesses describe, design, challenge and pivot their business model.

Purpose:

1. Visualize the Business Model: The canvas provides a structured, visual template
to map out the key components of a business model on a single page, making it
easier to understand and communicate the overall concept.

2. Identify Key Elements: The canvas prompts entrepreneurs to consider the 9 Key
building blocks of a model

3. Analyze and Innovate: The canvas can be used to analyze an existing model,
identify areas of improvement and explore new business model innovations.

4. Facilitate Discussion and Collaboration: It’s a useful tool for team discussion
discussions, brainstorming and collaborative business model development

Benefits:

1. Clarity and Alignment: Gain a clear holistic understanding of the model and ensure all
elements align

2. Flexibility and Adaptability: Can be easily updated as the business evolves

3. Competitive Advantage: A unique and innovative model can assist with having an edge
in the market

4. Communication and Presentation: An effective tool for communicating and presenting

a business model to stakeholders, investors and partners
 Elements of the Business Model Canvas
The 9 key elements/components of the Business Model Canvas include:

1. Key Partners: The network of suppliers, vendors and other organizations that are
essential for the business to function.

2. Key Activities: These activities are the most important actions any company must
take to operate its business model. They must be performed to deliver its value
proposition

3. Key Resources: These are the assets, both physical and intellectual, that are
necessary to make the business model work

4. Value Proposition : The bundle of products and services that create value for a
specific customer segment. It describes how the business solves a problem or
satisfies needs

5. Customer Relationships: it describes the types of relationships our company

establishes with its different customer segments and it covers how the company
interacts with and retains customers

6. Channels: This describes how our company communicates with and reaches its
customer segments to deliver its value proposition

7. Customer Segments: It defines the different groups of people or organizations a

company aims to reach and serve and it is important to clearly identify the target
customers

8. Cost Structure: Describes all the costs incurred to operate the business model
and includes the most important costs in executing the key activities of the
business

9. Revenue Streams: This represents the cash accompany generates from each
customer segment and describes the different ways the company makes money
through its value propositions

these nine interconnected components provide a comprehensive framework for describing,

designing and innovating a company's business model.
 Components of the Business Model Canvas
A business model is the rationale of how an organization creates, delivers and captures value.
In developing a business model, the entrepreneur has to consider numerous issues and the
varying options for dealing with each one.

VALUE PROPOSITION (How do you create value?)

The value proposition refers to the benefit the term intends to deliver. This is a combination of
things which the customer will get in exchange for payment. The entrepreneur must be confident
that something of value is being offered.

i. The Product Offering: The actual good, service or combination that

the firm will be selling.

ii. Standardized or Customized: The firm can offer a standard product

to all customers or provide customization.

iii. Direct or Indirect Distribution: Firms may sell directly to the

customers or use intermediaries.

iv. Internal Manufacturing or Outsourcing: Depending on the SWOT

analysis, it may be better to do all the work or contract some of the
load to local or foreign firms

BENEFICIARY (For whom do you create value?)

Every business must have a target market and it must be clear who the customer is and how large
the market is.

i. Business to Business (B2B), Business to Customer (B2C) or Both: A decision

helps the business develop its operational and marketing strategies.

ii. Local, Regional or International: The geographical scope is important in defining

the business model and developing strategy

iii. General or Niche Market: A general or mass market approach is different from a
niche market. The firm must consider the competition and its own resource
constraints when choosing its target market
OPERATIONS (What is your internal source of advantage?)

The structure and systems within the firm can make or break the business. Consider:

i. Internal capabilities of a business arriving out of organizational structures / culture

ii. Unique skills derived from previous experience, training or strategic hiring.
iii. Technologies which allow the firm to be more efficient or effective
iv. Benefits from existing patents and developing products which ca be patented.
v. Resources which the firm might be able to acquire to its advantage.

PRODUCT DIFFERIENTIATION (How do you differentiate your product)

The firm must find ways to make its product stand out from those of competitors

i. Operational Experience: This approach emphasizes the way the firm works and its
ability to deliver a superior customer experience.

ii. Product Quality: Delivering a better product that customers value

iii. Innovative Leadership: This is a factor that can distinguish firms

iv. Cost: Being efficient and keeping costs down means the firm can pass on savings to
its customers

v. Networks: Through the use of collaborative networks with other businesses and
brands

INCOME GENERATION (How do you intend to make money?)

The model must explain how the firm will make money and the mechanisms and sources must be
clearly defined.

i. Operating Leverage: The entrepreneur must determine how best to use the finance
that is available to manage cash and protect profits

ii. Volume: By having high sales volumes. Some firms count on fast-moving, high
volume sales while others do small numbers

iii. Margins: By having large profit margins on items so that a small sales volume is still
profitable. Conversely, small margins work with high volumes

iv. Pricing: Using different pricing strategies, fir example fixed prices for all markets or
variable pricing.
 v. Revenue Sources: Tell how the firm will make money as there are often alternative
revenue sources. Eg: Newspaper.

INVESTMENT MODELS (What are the time scope and ambitions of the venture?)

Entrepreneurs should consider the medium and long-term prospects for the business. The model
must describe the expected growth, giving a sound rationale for projections.

i. Subsistence Models: This is where the entrepreneur enters the business strictly for
the purpose of survival. No growth vision involved.

ii. Income Model: The entrepreneur is more focused on enjoying a lifestyle. The
enterprise is a means for merely substituting an existing income or establish a desired
one. The growth is not major.

iii. Growth Model: There is a focus on a long-term vision for the business and a growth
plan is developed. This includes milestones from short-term into the long-term.

iv. Speculative Model: A contingency based approach for exploiting an attractive

opportunity. There isn’t really a long-term plan. If the business works, it would
continue, if not, the entrepreneur would move on to something else.

Developing a Business Model for a Business Plan

Using the list of components of a business model, the entrepreneur is able to develop a model for
his business by considering which options under the six components would work for his
business. It is important that each element complement each other and make the business
profitable and competitive.
 The Business Plan
A business plan is a document which outlines the various elements of the proposed business and
demonstrates how it will operate as well as how resources would be used and profits generated.
The information must be objective, measurable and answer questions that investors, lenders and
business associates would have. When the existing venture is to assume a chance or when
planning a new one, a 3-5 year business plan is required as that is when investors will look for
the ROI.

It is a blueprint for the company and an indispensable tool in attracting investors, obtaining loans
or both and is an indicator of what can be expected of the entrepreneur and the business. It
prepares the entrepreneur of the journey ahead by providing clarity and a glimpse of possible
opportunities or challenges the business may face. The plan is considered to improve the chances
of success.

ELEMENTS OF THE BUSINESS PLAN

1. Executive Summary: This section comes first but is done after the writing of the
plan is completed. It summarizes the entire plan and presents the key points that
decision makers will be looking for.

2. Business Description: It is the opportunity to describe in detail what the business

does and how it is expected to fit into the business landscape. A large part of the
business model is laid out in this section. It usually describes the industry and
economy first and then the business itself. It would not be complete without the
value proposition.

3. Management Description: Identifying the key persons behind the business

venture and their respective roles. Winning support for the venture entails
providing evidence that the team has the requisite skills and experience to get the
job done. Investors often look for high commitment levels.

4. Marketing Analysis: This is where the market research and the plan that was
developed are outlined. It must present details of the competitive environment,
differentiation strategies and show how elements of the marketing mix (Product,
price, Place, Promotion) will come together, It should explain how the firm will
price, promote and distribute its product to the target customers. How is the revenue
determined? Who is my competition? How am I better or different? What will my ideal
customer pay? Location?

5. Operations: This section lays out the critical decisions about how the necessary
resources are transformed into the product. It deals with issues such as location,
resource acquisition and the management of manufacturing or service delivery.
6. Financials: All the planning comes down to making the revenue and profits
which would make the enterprise worthwhile. It is important to show the basis for
the projections and demonstrate how the operations and marketing will translate
into cash flow, break-even and finally, profitability.