UNIT 2

Concept, Principles and Processes for Simple Business Plan

6.5 Overall report of starting and operating a simple business

What is a
Business Plan?
• A business plan is a written
document that describes in detail
how a business—usually a
startup—defines its objectives and
how it is to go about achieving its
goals.
• A business plan lays out a written
road map for the firm from
marketing, financial, and
operational standpoints.
• Business plans are important documents
used to attract investment before a
company has established a proven track
record. They are also a good way for
companies to keep themselves on target
going forward.
• Although they're especially useful for
new businesses, every company should
have a business plan. Ideally, the plan is
reviewed and updated periodically to
see if goals have been met or have
changed and evolved. Sometimes, a new
business plan is created for an
established business that has decided to
move in a new direction.
 Understanding Business Plan
A business plan is a fundamental document that any startup business
needs to have in place prior to beginning operations. Banks and
venture capital firms indeed often make writing a viable business plan a
prerequisite before considering providing capital to new businesses.
A good business plan should outline all the projected costs and possible pitfalls of
each decision a company makes. Business plans, even among competitors in the
same industry, are rarely identical. But they all tend to have the same basic
elements, including an executive summary of the business and a detailed
description of the business, its services, and its products. It also states
how the business intends to achieve its goals.
The plan should include at least an overview of the industry of
which the business will be a part, and how it will distinguish
itself from its potential competitors.
Elements of a Business Plan
❖ Executive Summary
This section outlines the
company and includes the
mission statement along with
any information about the
company's leadership,
employees, operations, and
location.
 ❖ Products and services
Here, the company can outline the
products and services it will offer, and
may also include pricing, product
Elements of a lifespan, and benefits to the
consumer. Other factors that may go
Business into this section include production
and manufacturing processes, any
Plan patents the company may have, as
well as proprietary technology. Any
information about research and
development (R&D) can also be
included here.
Elements of a Business Plan
❖ Market analysis
A firm needs a good handle of the
industry as well as its target market. It
will outline who the competition is and
how it factors in the industry, along with
its strengths and weaknesses. It will also
describe the expected consumer
demand for what the businesses is
selling and how easy or difficult it may
be to grab market share from
incumbents.
 ❖Marketing Strategy
This area describes how the
company will attract and keep
Elements its customer base and how it
intends to reach the
of a consumer. This means a clear
Business distribution channel must be
outlined. It will also spell out
Plan advertising and marketing
campaign plans and through
what types of media those
campaigns will exist on.
❖ Marketing Strategy
This area describes how the
company will attract and keep its Elements
customer base and how it intends to of a
reach the consumer. This means a
clear distribution channel must be Business
outlined. It will also spell out
advertising and marketing campaign Plan
plans and through what types of
media those campaigns will exist on.
 Elements of a
Business Plan
❖ Financial planning
In order to attract the party reading
the business plan, the company
should include its financial planning
and future projections. Financial
statements, balance sheets, and
other financial information may be
included for already-established
businesses. New businesses will
instead include targets and estimates
for the first few years of the business
and any potential investors.
 ❖Budget
Any good company needs
Elements of a to have a budget in place.
Business This includes costs related
to staffing, development,
Plan manufacturing, marketing,
and any other expenses
related to the business.
Special
Considerations
❖ Financial Projections
A complete business plan must include
a set of financial projections for the
business. These forward-looking
projected financial statements are
often called pro-forma financial
statements or simply the "pro-formas."
These statements include the overall
budget, current and projected financing
needs, a market analysis, and the
company's marketing strategy.
 The idea behind If there are any A business plan is not
putting together a especially interesting meant to be a static
business plan is to aspects of the document. As the
Special enable owners to have
a more defined picture
business, they should
be highlighted and
business grows and
evolves, so too should
Consideration of potential costs and
drawbacks to certain
used to attract
financing. For example,
the business plan. An
annual review of the

s business decisions and

to help them modify
Tesla Motors's electric
car business essentially
plan allows an
entrepreneur to
their structures began only as a update it when taking
accordingly before business plan. markets into
implementing these consideration. It also
ideas. It also allows provides an
owners to project what opportunity to look
type of financing is back and see what has
required to get their been achieved and
businesses up and what has not. Think of
running. it as a living document
that grows and evolves
with your business.