Chapter 7 entrep
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Transcript of Chapter 7 entrep
CHAPTER 7
Developing A Business Plan
WHAT BUSINESS PLANNING EXPLAINED?
Planning is -What to do.-How to do it.-When to do it.-What to expect in the
future.
It involves the attainment of goals, and the way to accomplish such goals.
PRINCIPLES OF PLANNING
(General application particularly for micro and small business)
1. Planning must be realistic2. Planning must be based on felt needs3. Planning must be flexible4. Planning must start with simple projects
STAGES OF BUSINESS PLANNING
( Based on Phillip Kotler)
1. Unplanned stage- the owner- manger is busy looking for funds, customers. Materials and equipment.
2. Budgeting- System stage- the owner- manager realizes the need to develop budgeting system.
3. Annual planning stage- the owner drafts an annual plan.
4. Strategic planning stages- this is a 3 or 5 year planning.
CRITERIA OF EFFECTIVE PLANNING
1. The plan should state clearly its objectives.2. The plan should provide measures for a
satisfactory accomplishment of the objectives in terms of quantity, quality, time and cost.
3. The plan should state the policies which should guide people in attaining the objectives.
4. The plan should indicate what department or unit will be involved in accomplishing the objectives.
CONTINUATION- PRINCIPLE OF CRITERIA OF EFFECTIVE PLANNING
5. The plan should indicate the time which should be allowed for each activity.
6. The plan should specify the required resources and their corresponding costs.
7. The plan should designate the officers who will be held accountable for the accomplishment of the objectives.
COMPONENTS OF BUSINESS PLANNING
1. SWOT2. Objectives3. Strategies4. Time frame
ACTIVITY MONTH
1 2 3 4 5 6 7 8 9 10 11 12
1. Market analysis
2. Strategies
Organizational
Financial
Production
marketing
3. Open business
4. Ten percent sales increase
5. Purchase equipment
CHARACTERISTICS OF SOUND BUSINESS PLAN
1. Objective2. Clear3. Logical and simple4. Flexible5. Stable6. Complete and integrated
OBTAIN THE FACTS FOR A BUSINESS PLAN
( Here are the questionnaires to get the necessary data)
1. What is unique about my products/ service?2. Who are my competitors?3. How will my customers buy?4. What is my share in the market?5. What is the market potential?6. Who are my customers and where are they
located?7. Where will I put up my business?
OUTLINE OF A BUSINESS PLAN
•Cover sheet: Name of business, names of principals, address and phone number
• Business goals•Strategies•Table of Contents
SECTION ONE: The Business
A.Description of BusinessB.Product/ ServiceC.MarketD.Location of BusinessE.CompetitionF.ManagementG.PersonnelH.Application and Expected effect of Loan ( if neede)I.Summary
SECTION TWO: Financial Data
A.Sources and Application of FundingB.Capital Equipment ListC.Balance SheetD.Break- Even AnalysisE.Income Projections ( Profit and Loss Statements)
•Five year summary•Detail by month for first year•Detail by quarter for second, third, fourth, and fifth year
F. Cash flow Projection
1.Detail by month for first year2.Detail by quarter for second, third, fourth, and fifth years3.Notes of Explanation
G. Deviation Analysis
H. Historical Financial Reports for Existing Business
1.Balance sheets for past five years2.Income statements for past five years3.Tax returns
SECTION THREE: Supporting Documents
Personal resumes, personal balance sheets, cost of living budget, credit reports, letter of reference, job descriptions, letters of intent, copies of leases, contracts, legal documents, and anything else relevant to the plan.
STEPS IN BUSINESS PLANNING
1. Evaluate your personal resources and interests, and the resources of the community.
2. Analyze your market3. Choose a proper business location4. Prepare a financial plan5. Prepare a production plan6. Prepare an organizational plan7. Prepare a management plan
THE IMPORTANCE OF BUSINESS PLANNING
1. Planning can eliminate business risks2. Planning can minimize costs of production3. Planning can detect the weaknesses of the
business operations
THE END
SALAMAT SA LISTENING!
GODBLESS!
CHAPTER 7QUIZ
1. STAGE OF BUSINESS PLAN THAT IN 3 OR 5 YEAR
PLANNING.
2. IT IS THE STAGE OF BUSINESS PLAN THAT THE
OWNER DRAFTS AN ANNUAL PLAN.
3. THE OWNER- MANAGER REALIZES THE NEED TO
DEVELOP BUDGETING SYSTEM.
4. THE OWNER- MANGER IS BUSY LOOKING FOR FUNDS,
CUSTOMERS. MATERIALS AND EQUIPMENT.
5. PART OF BUSINESS PLAN OUTLINE THAT TELLS THE
NAME OF BUSINESS, NAMES OF PRINCIPALS, ADDRESS AND
PHONE NUMBER
6. SECTION OF FINANCIAL DATA THAT TELLS THE SOURCES AND
APPLICATION OF FUNDING
7. PART OF BUSINESS PLAN OUTLINE THAT TELLS THE NAME OF BUSINESS, NAMES OF PRINCIPALS,
ADDRESS AND PHONE NUMBER
8. SECTION OF BUSINESS PLAN THAT TELLS THE PERSONAL RESUMES,
PERSONAL BALANCE SHEETS, COST OF LIVING BUDGET, CREDIT
REPORTS, LETTER OF REFERENCE, JOB DESCRIPTIONS, LETTERS OF
INTENT, COPIES OF LEASES, CONTRACTS, LEGAL DOCUMENTS,
AND ANYTHING ELSE RELEVANT TO THE PLAN.
9. IT INVOLVES THE ATTAINMENT OF GOALS, AND THE WAY TO ACCOMPLISH
SUCH GOALS.
10. THE OWNER- MANGER IS BUSY LOOKING FOR FUNDS,
CUSTOMERS. MATERIALS AND EQUIPMENT
11-13.COMPONENTS OF BUSINESS
PLANNING
13- 18CHARACTERISTICS OF SOUND
BUSINESS PLAN
19-20 IMPORTANCE OF BUSINESS
PLANNING