BBA pokhara university

1. Chapter-7
Business Plan

2. Concept of Business Plan
 A business plan is a proposed or intended course of action. It is a document
about the future of business. It integrates functional plans such as production,
finance, human resource and marketing.
 It demonstrates the feasibility of the prospective business. It is a written
document or roadmap of business operation.
 An effective business plan convinces the readers that the new business is
exciting and need support.
 It should clearly demonstrates the cost and benefit analysis.
 It should answer 5Ws and 1 H regarding your business in advance.
What type of business you are going to start ?
How you are going to start ?
When you are going to start ?
Where you are going to start ? And so on.

3. “The term business plan means the development of a written document
that spells out like a roadmap where you are , where you want to be ,
and how you want to get there.”
Kaplan
Definition of Business Plan

4. Scope of Business Plan
 The scope of a business plan refers to the target reader of the plan. The
readers may be employees, investors, bakers, advisors and consultants.
Each of these group read the plan for different purpose. Hence, the
entrepreneur should attempt to satisfy all of their concerns. The employees
are the internal parties and the investors and other stakeholders are external
parties.

5. I. Employees: Business plan is important for both managerial and
administrative employees. It articulates the vision and mission of
your firm. It guides the employees to move ahead in a consistent
and purposeful manner.
II. Investors and other stakeholders: Business should be realistic. It
should ensure a high return to the investors with minimum risk.
It also requires a sound financial projection. It should also ensure
the validation of ideas.
Scope of Business Plan

6. Significance of Business Plan
1. Create a new business(roadmap of business)
2. Business growth
3. Seek business investment
4. Risk management
5. Means of communication(vision, mission, strategies)
6. Product/service description
7. Cash flow

7. Content/Elements of Business Plan

8. 1. Executive Summary

9. 2. Industry Analysis

10. 3. Company Description

11. • .
.

12. 5. Marketing plan

13. 6. Financial analysis

14. 7.Assessment of Risk

15. 8. Scheduling and milestones

16. 9. Appendix

17. Evaluation Criteria of Business Plan
1. Clarity, completeness, and persuasiveness of the written business plan and
oral presentation.
2. The usefulness and quality of the business plan concept (e.g., product,
technology, service).
3. The marketability of the proposed venture (does demand of concept exist).
4. The financial return of the proposed venture.
5. Milestones expressed in the business plan
6. Contingency planning and risk assessment
7. The capacity and strength of the management team (experience and
expertise).
8. The quality of the team members’ responses to questions from the judges.
9. Three Cs(Character, Cash flow and Collateral) of an entrepreneur

18. A. Market information needs:
Market potential for the product(target market)
Size of the market(bigger, smaller, growth prospect)
PEST Analysis should be conducted
B. Operations information needs:
Location
Manufacturing operations (machines and assembly operations etc.)
Raw material(sources of supplier, name, address etc.)
Labor skills (what sorts of skills will be needed ?)
Information Needs

19. Information Needs
C. Financial information needs:
Develop a cash flow statement
Projected income statement
Projected balance sheet
Break even analysis

20. Using Internet As a Resource Pool
 Internet is a powerful source of information for an entrepreneur.
 It can provide information easily and economically on industry analysis,
market analysis and competitor's analysis.
 It also serves as a rich source of planning and decision making.
 Internet also serves as a powerful tool for writing a business plan.
 Internet search engines such as Google and Yahoo provide tremendous
opportunities to access articles, journals, social networks, blogs,
discussion groups etc.

21. Reasons for Failure of a Business Plan
1. Goals set by the entrepreneur are unreasonable
2. The entrepreneurs has no experience in the planned business
3. The entrepreneurs has no sense of potential threats to or weakness of
business.
4. No customer need was established for the proposed product or service.
5. No market research was conducted
6. Failure to Include Milestones