Download - How to prepare a Business Plan?

BUSINESS PLAN

Introduction to the Business Plan Goal Setting

TASK - 1

This is your first and perhaps easiest task in writing a Business Plan.

In this element of your Business Plan, you are to introduce your company to the reader and explain the purpose of your business plan.


TASK - 1

It should be used to briefly familiarize the reader with who are you, what the goals of your business, when these goals will be accomplished

If you are presenting your plan to a banker, you may state how much you intend to borrow, and what you intend to do with the funds.


Goal Setting Application

Are the goals which you have put into your introduction clear and unambiguous to you and to an outside reader?

Do you understand them clearly?


Goal Setting Application

Will you be able to say when you have achieved them or are they vague and indeterminate?

Do you know by WHEN you aim to achieve them?

Description of Business Risk Taking

TASK - 2

This section of the Business Plan provides background and other information on how your business was started and how it is presently doing or

If a proposed business, how and when you plan to start it


TASK - 2

Contents of this Section

For an existing business, the following topics should be covered:

Name of Business: Legal Name and Trade Name, if any

Date and Place of Registration or Incorporation, if any

Date actual operations began or planned to begin


TASK - 2


Brief History: Discuss the type of business, the major events in the past operations, and discuss the results, mentioning sales history when pertinent.

Form of Business Organization: Corporation, Partnership, or Proprietorship

Names of Owner, Partners or Major Investors.


TASK - 2


For a proposed business, provides as much of the above information as is possible.

You should explain what the business will be, how the idea originated and how the business is expected to develop.


Risk Taking Application

If you are proposing to start a new business, have you really thought through the risks involved.

By planning the business carefully and evaluating alternative, as suggested in this workbook, you will reduce the risk, but it can still happen.

Description of Business Risk Talking

Risk Taking Application

Will you be able to survive failure?

Remember that entrepreneurs are not gamblers, but they must and do task risks.

Have you got what it takes.

Description of Products or Services Demand for Quality and Efficiency and Opportunity Seeking and Initiative

TASK- 3

In this section of the Business Plan you discuss the products and/r services that you will be selling.

Part of the information that will be included in this section is for the benefit of outside readers who may not be familiar with your business.


TASK- 3


Description of Products and/or Service: Explain what it is that you are selling.

Be specific

On the other hand, if you will sell your services as a bookkeeping firm, you may need to do little more than list the services that you will provide.


TASK- 3


Question to ask are: -

What are you selling?

How will it benefit the customer?

Which product or service will be in demand?

What is different about your product or service?


TASK- 3


Status of the Products and/or Service: Are your products and/or Services available for sale now?

If not, what needs to be done to develop them?

Have you actually produced one or more completed products?


TASK- 3


If you are selling a service, do you presently have the skills and technical capability to provide it?

If not, what needs to be done?

If additional inputs are required before you products or services can be sold, indicate the amount of time that you will need to complete this process.

Customer -- Opportunity Seeking and Initiative and Information Seeking

TASK- 4

This will become a part of your marketing Plan

The purpose of your market research is to identify your Market Area (i.e. the geographical area where the majority of your customer are located), Market Size (how much money people spend in a year on your kind of product or service in your area) and Market Trends (whats expected to happen to this market in the future).


TASK- 4

Three components of that market:

Customers

Competitors

Products (or Services).


TASK- 4

Contents of this Section:

Determine in detail who your customers are, or are likely to be.

Be as specific as possible,

For instance, if you will be selling only to hotels, and there are only a dozen in your market, then list each of them.


TASK- 4


If you sell to the general public, instead of to other business, then you may need to group potential customer according to their demographics, such as age, income, education, ethnicity, etc.

While you need to know who your potential customers are, it is useful to also know how much each individual target group will contribute to your business.

Competition Persistence and Information Seeking

TASK- 5

Part of your Marketing Plan

You can learn exceptionally important lessons about your business by noting how your competitors operate their business.

Try to learn as much as you can from their successes and their failure.

Competition can be inspiring rather than threatening if it is fully researched and understood.


TASK- 5


Description of Competitors: Identify those businesses which will be competing with you. List any expected or potential competitors

Size of Competitors: Determine the assets and sales volume of the major competitors. Will you be competing against firms whose sizes is similar to your or will you be competing against corporations.


TASK- 5


Profitability of Competitors: Try to determine how profitability the business is for those companies already in the field

Operating Methods: For example, what pricing strategy does each firm use? In addition to price, you may also want to consider: -

Quality or product and/or service:


TASK- 5


Hours of operation

Ability of personnel

Servicing; warranties and packaging

Methods of selling; distribution channels

Credit terms; volume discounts

Location


TASK- 5


Advertising and Promotion

Reputation of company and/or principals

Inventory levels

Many of the above items will not relevant to all businesses

After you have completed your research, it is useful to summarize your finding in tabular form, such as the one shown in the sample.

Pricing Persuasion and Networking

TASK- 7

Part of your Marketing Plan


In this task, you have to consider your pricing policy, Pricing is often one of the things that a small businessman spends too little time.

The determination of prices should be done, however, taking a lot of other factors into consideration.

Some factors that you want to consider are:


TASK- 7

Cost. If you wholesale or retail merchandise, you should explain the basis of your markup.

Consumer Perceptions. Another consideration when setting your prices is the perception of the value of your products and/or services by the consumer.

Competition. Competition is, of course, an important consideration in pricing.


TASK- 7

The objective of your pricing is, of course, to set the price at the level that maximizes profits.

Penetration pricing, which the Japanese often use, is a good illustration of this.

In your Business Plan, you should describe your pricing policy and explain why you think this policy will result in the maximization of your profit.


Persuasion and Networking Application

It is easy to fall into the trap of believing that the best, or even the only way to persuade people to bus something from a new supplier is by offering the lowest price.

Probably not, because factors like service, location and quality were more important than the price.

When you are considering your prices, think about how it will be when you are trying to sell your products.


Persuasion and Networking Application

In business you cannot ORDER people to do things, no matter whether what you want them to do it is to work harder or to buy your products.

You have to PERSUADE them, by showing them that it is in their best interest to do what you want them to do.

Thank you