THE
BUSINESS PLAN
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LEARNING OBJECTIVES
▸ At the end of the lesson, the learners will be
able to:
1. Define business plan
2. Identify content and focus of business plan.
3. Discuss the importance of the business
plan.
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1.
What is Business Plan?
4 In starting up a business plan, an entrepreneur must consider
its business environment both internal and external. Business
Plan answers the following questions:
1. WHERE AM I NOW?
2. HOW DO I GET THERE?
3. WHY DO I WANT TO BE
THERE?
4. WHERE AM I GOING?
“
BUSINESS PLAN is a detailed
and integrated written document that
describes the various activities involved
in opening and operating a new
entrepreneurial venture.
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Business Plan
▸ It contains a set of business goals and the plan for reaching those goals.
▸ It evaluates all the aspects of the financial viability or worthiness of the
planned business.
▸ It serves as a road map for the business and provides direction.
▸ It describes all the relevant information, internal and external elements
and strategies for starting a business or in expanding an existing
venture, amidst a dynamic business environment.
▸ It integrates the different functional plans such as marketing,
manufacturing, finance, and human resource management, taking into
consideration the overall strategy of the business.
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2.
Focus of a Business Plan
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Business Plan serves many masters.
First Second Third
It serves the It serves the It serves the
ENTREPRENEUR INVESTORS MANAGERS and
STAFF of the
who must set a and cautious
organization so
navigational FINANCIERS. that they will know
course. the strategies and
programs of the
enterprise.
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3.
Contents of a Business
Plan
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The following format may be a good start:
• Introduction
• Environmental Analysis
• Description of the business
• Production/Operation Plan
• Marketing Plan
• Financial Plan
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INTRODUCTION
The introduction presents the general perspective of the
business. It may consist of one to two pages. It includes, among
others, the following sections;
▸ Proposed name of the business
▸ Address of the business
▸ Name of the owner or owners
▸ Description of the business
▸ Location of the business
▸ Funding requirements and source
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ENVIRONMENTAL ANALYSIS
It is a strategic tool that helps determine the external and internal
factors affecting the performance of the business. These factors
may be political, economic, social, or technological in nature. The
environmental analysis section is considered the heart of the
business plan.
▸ Conditions of the general environment (i.e., Sociocultural,
technological, economic, and political – legal conditions.)
▸ Conditions of the specific environment (i,e., supply and demand
conditions, competition)
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DESCRIPTION OF THE BUSINESS
The business description sections present the nature and form of
the business to be undertaken, and may cover two to three pages.
As to nature, the business may be a merchandising, service, and
manufacturing
▸ Products and/ or service
▸ Size of the business
▸ Mission statement and core values
▸ Location of the business and its major physical assets
▸ Background of the business owners/entrepreneurs.
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PRODUCTION PLAN
This section describes the complete manufacturing
process.
▸ Manufacturing process
▸ Physical plant
▸ Machinery and equipment
▸ Suppliers of raw materials
▸ Future capital equipment needs
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OPERATION PLAN
This section includes whether the business is
concerned with manufacturing or service type of
business.
▸ Description of the company’s operations
▸ Flow of orders for goods and services.
▸ Distribution and procedures in completing a business
transactions
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MARKETING PLAN
Basically, the business plan describes the factors of the marketing
mix in its various sections, such as a product and people in the
business description section, place or location in the introduction,
and positioning in the environmental analysis section.
▸ 7 P’s of the marketing mix
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FINANCIAL PLAN
The last major section of the busines plan that accumulates and
describes all the data expressed in monetary units from other
sections of the business plan.
▸ Major assumptions
▸ Projected financial statements
▸ Financial statement analysis
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4.
The Importance of
Business Plan
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Business Plan should be written to:
• Improves business ideas and concepts.
• Guides actions to entrepreneurs or business
owners for possible problems.
• Increase odds of success of the business
• Requirement by other parties to assess the
business.
• Serve as a basis for evaluation whether the
business reach its goal or needs improvements.
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Check your
understanding!
Identify the part of the business plan defined in each
21
item below.
Introduction Marketing Plan Financial Plan
Environmental Description of
Analysis the business
1. It presents the nature and form of the business to be undertaken.
Description of the Business
Identify the part of the business plan defined in each
22
item below.
Introduction Marketing Plan Financial Plan
Environmental Description of
Analysis the business
2. This document contains current financial situation as an
entrepreneur and long –term goals as well as tactics to attain
objectives.
Financial Plan
Identify the part of the business plan defined in each
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item below.
Introduction Marketing Plan Financial Plan
Environmental Description of
Analysis the business
3. This section describes the target market for the new product or
service and business strategies.
Marketing Plan
Identify the part of the business plan defined in each
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item below.
Introduction Marketing Plan Financial Plan
Environmental Description of
Analysis the business
4. This section provides a brief summary of the business plan’s
content.
Introduction
Identify the part of the business plan defined in each
25
item below.
Introduction Marketing Plan Financial Plan
Environmental Description of
Analysis the business
5. This section is considered the heart of the business plan
Environmental Analysis
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Place your screenshot here Check Activity 4
on Moodle
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CONGRATULATIONS!
You have completed
your journey in this
topic. Great job!
Thank you everyone and
God bless us all!
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