of 23
8/6/2019 Lecture 5th
1/23
The Business Plan
Nouman Dar
Creating And Starting Venture
8/6/2019 Lecture 5th
2/23
Todays Topics
What is Business Plan
Scope and Value of Business Plan
Information Needs
Writing Business Plan (Outlines ofBusiness Plan)
8/6/2019 Lecture 5th
3/23
To Be An Entrepreneur
Three basic ways of to be an Entrepreneurare
1. Buying a Current Operation
2. Buying a Franchise
3. Starting One From Scratch
8/6/2019 Lecture 5th
4/23
Getting into Business Venture
To run a business venture hundred of little tasks (activities)must be done.
These are the activities the business has to be concerned with
However, before any of them are carried out the prospectiveowner needs a formal business plan
He needs to seek the answer of following questions
o What is the business going to do?o Where will it get the necessary starting capital?
o What kind of management, marketing and financialproblems will it face?
8/6/2019 Lecture 5th
5/23
Business Plan
Written Document DescribingAll RelevantInternal and External Elements and
Strategies forD
escribing a Business Venture
8/6/2019 Lecture 5th
6/23
Business Plan
It is often integration of functional plans such asmarketing, finance, manufacturing and human resources
It addresses both short term and long term decisionmaking
Business plan show what the company is going to do, itsprojected expenses & earnings and its plans for repaying
the loans
Stands as the entrepreneurs description & prediction ofhis/her venture
8/6/2019 Lecture 5th
7/23
Business Plan
Referred to the Game Plan or Road Map
It forces owner to answer
o Where am I going?
o How will I get?
o What opportunities &problems will I run into along
the way?o How will, ideal with them?
8/6/2019 Lecture 5th
8/23
Who Should Write Business Plan
Should be prepared y Entrepreneur
May consult with many other sources in its
preparation
8/6/2019 Lecture 5th
9/23
Scope & Value of Business Plan
Who Reads the Business Plan?
Investors
BankersVenture Capitalist
Advisors and Consultants
Suppliers???
Employees???
8/6/2019 Lecture 5th
10/23
Scope & Value of Business Plan
Three Perspectives Should Be Considered in
Preparing the Plan
1. Perspective of the entrepreneur2. Marketing perspective
3. Perspective of investor (Entrepreneur should try to
review his business through eyes of investor)
8/6/2019 Lecture 5th
11/23
Scope & Value of Business Plan
It helps determine the viability of the venture in adesignated market
Provides guidance to the entrepreneur in organizing hisor her planning
Serves as an important tool in helping to obtainfinancing
Provides a self of assessment by the entrepreneur Does the idea make sense? Will it work? Who is mycustomer? Does it satisfy customer needs? What is thelevel of competition? What protections have to made?
8/6/2019 Lecture 5th
12/23
How Do Potential Lenders &
Investors Evaluate Plan
Lenders or investors will likely vary in termsof their needs & requirements in the
Business Plan Primarily interested in the ability of the new
venture to pay back the debt includinginterest with in a designated period of time
Four Cs of Credit: Character, Cash Flow,Collateral & Equity Contribution
8/6/2019 Lecture 5th
13/23
8/6/2019 Lecture 5th
14/23
Market Information Needs
To ascertain the size of the market
It is first necessary for the entrepreneur to define the
market A well defined target market will make it easier to
project market size & subsequent market goals for thenew venture
In order to build a strong marketing plan theentrepreneur need to gather information on theindustry and market
8/6/2019 Lecture 5th
15/23
Operational Information Needs
Location
Manufacturing Operations
Raw Materials
Equipment
Labor Skills
Space
Overhead
8/6/2019 Lecture 5th
16/23
Financial Information Needs
Capital Cost
FinancingRequirement
Sources of Financing
Cash Flows
Operating Profits
8/6/2019 Lecture 5th
17/23
Writing Business Plan Outline of
Business Plan
Introductory Page
o Name and Address of Business
o Name (S) and Address(es) of Participant(s)o Statement of Financing Needs
o Statement of Confidentiality ofReport
Executive Summary Summarizing theComplete Business Plan
8/6/2019 Lecture 5th
18/23
Writing Business Plan Outline of
Business Plan
Industry Analysis
o Future Outlook and Trends
o Analysis of Competitors
o Market Segmentation
o Industry and Market Forecast
Description of Venture
o Products
o Services
o Size of Business
o Office Equipment and Personnel
o Background of Entrepreneurs
8/6/2019 Lecture 5th
19/23
Writing Business Plan Outline of
Business Plan
Production Plan
o Manufacturing Process
o Physical Planto Machinery and Equipment
o Suppliers ofRaw Materials
Operational Plan
o Description of Company Operations
o Flow of Orders for Goods and Services
o Technology Utilization
8/6/2019 Lecture 5th
20/23
Writing Business Plan Outline of
Business Plan
Marketing Plano Pricing
o Distribution
o Promotiono Product Forecasts
o Controls
Organizational Plan
o Form of Ownershipo Identification of Partners or Principals Shareholders
o Authority of Principals
o Management Team Background
o Roles and Responsibilities
8/6/2019 Lecture 5th
21/23
Writing Business Plan Outline of
Business Plan
Assessment ofRisko Evaluate Weakness of Business
o NewTechnologies
o Contingency Plans
Financial Plano Pro Forma Income Statement
o Cash Flow Projectionso Pro Forma Balance Sheet
o Break Even Analysis
o Sources and Application of Funds
8/6/2019 Lecture 5th
22/23
Writing Business Plan Outline of
Business Plan Appendix (Contains Backup- Material)
o Letters
o Market Research Data
o Leases or Contracts
o Price Lists From Suppliers
8/6/2019 Lecture 5th
23/23
Thank You
