1. ENT/ETR300 FUNDAMENTALS OF ENTREPRENEURSHIPBUSINESS PLANBUSINESS PLANMODULE 7

2. ENT/ETR300 FUNDAMENTALS OF ENTREPRENEURSHIPBUSINESS PLAN Learning OutcomeAt the end of the module, studentsshould be able to: understand what is a business plan and reasons forpreparing it understand the format of a business plan prepare a business plan and present a business plan 3. ENT/ETR300 FUNDAMENTALS OF ENTREPRENEURSHIPBUSINESS PLAN What Is a Business Plan?A business plan is a written documentwhich described the proposed businessor project to be undertaken in acomprehensive manner.It is also known as a working paper,business proposal, project paper orprospectus. 4. ENT/ETR300 FUNDAMENTALS OF ENTREPRENEURSHIPBUSINESS PLANReasons For Preparing a Business Plan1. Opportunity for entrepreneur to assess the business venture objectively, critically and practically.2. To study and evaluate the feasibility of the business.3. To convince venture capitalists, investors and bankers in order to raise capital and obtain support for the venture.4. As a guideline for day-to-day management of thebusiness.5. To be able to distribute business resources moreeffectively. 5. ENT/ETR300 FUNDAMENTALS OF ENTREPRENEURSHIP BUSINESS PLAN Readers of the Business Plan:1.Entrepreneurs2.Investors3.Bankers4.Financial Assistance Providers5.Suppliers6.Customers7.Employees 6. ENT/ETR300 FUNDAMENTALS OF ENTREPRENEURSHIPBUSINESS PLAN Format Overview Cover Letter Introduction Purpose of business plan Cover Page Company background Table of Contents Owner(s) background Business location Executive Summary Marketing plan Main Body Operations plan Organizational plan Appendices Financial plan Conclusion or summary 7. ENT/ETR300 FUNDAMENTALS OF ENTREPRENEURSHIPBUSINESS PLAN Main Body of Business Plan Introduction Should clearly state name of company, nature of business, location, operational date and prospects of business Purpose State the key purpose of preparing plan (e.g.for financing, business viability assessment,operational blueprint etc.) 8. ENT/ETR300 FUNDAMENTALS OF ENTREPRENEURSHIPBUSINESS PLANMain Body of Business Plan Company Background details regarding the company legal structure (registered name,form address and when registered), main activity & dateoperations start. Owner Background Details of each individual that is a registered owner of thebusiness State relevant qualifications, skills, experience, role in businessand stake or share in business Location Specify physical location of business premise, operationspremise (if different), advantage of location in helping businessachieve objectives (e.g. proximity to suppliers, target market orusability of space) 9. ENT/ETR300 FUNDAMENTALS OF ENTREPRENEURSHIPBUSINESS PLANMain Body of Business Plan Marketing plan Need to highlight target customers, key products and services & sales forecast Operations plan Use sales forecast to plan capacity, material, equipment and manpower needs Organizational plan Indicate company structure and key talents Financial plan Amalgamate budget considerations for marketing, operations and organizational needs into project cost and sources planning as well as projections of cash, profit and asset & liability position of planned business 10. ENT/ETR300 FUNDAMENTALS OF ENTREPRENEURSHIP BUSINESS PLANWriting up the Business Plan The first step is to have a Business Plan typed and edited. The second step is to edit the Business Plan. As a checklist for a complete business plan, entrepreneurmay refer to Table 4.12 11. ENT/ETR300 FUNDAMENTALS OF ENTREPRENEURSHIPTyping FormatBUSINESS PLANMajor Headings Font type Arial size 12 or Times New Roman size 14, bold Left justified, mixed case with major words capitalized and bold with one lineabove and one line below the heading to separate it from the text.The Second Heading Level Italicized with the major words capitalized. The paragraph is indented five spaces, or half inch on the left.The Third Heading Level Indented, italicized and major words capitalized.Text in Sections Font type Arial size 11 or Times New Roman size 12 The first paragraph is not indented. Do not space between paragraphs within a section. 12. ENT/ETR300 FUNDAMENTALS OF ENTREPRENEURSHIP Typing Format BUSINESS PLANTables and figures Professional in appearance and should not be hand drawn. Auto fit to the Windows/contents from the Table menu of MSWord. Should not split into two pages.Printing A laser quality printer. Wide margin, at least one and half inch on the left, one inch on the top,bottom and right. Double spacing.Binding A simple comb or spiral binding A plastic cover on the front and a thick dark colored paper at the back. 13. ENT/ETR300 FUNDAMENTALS OF ENTREPRENEURSHIPBUSINESS PLANTable 4.12 Business Plan ChecklistIntroduction What is the name of the company? To whom the business plan is prepared? Who are the owners or partners of the company? What is the correspondence address?Purpose Why the business plan is prepared? Is the purpose to get financing? Who asked for the financing? How much financing is needed? How the financing is going to be utilized? What help this financing will give to the company? How are we going to pay back the financing? Is there any other alternative source of financing to ensure the proposed project is successful? 14. ENT/ETR300 FUNDAMENTALS OF ENTREPRENEURSHIPBUSINESS PLANCompany Background What is the main product; good or services, the company is planning tooffer? What are the main characteristics of the product? Is it a new company or an existing company planning for expansion? What form the business is? Why the form is preferable? What are the companys strengths and weaknesses? How to overcome these weaknesses? How the proposed project is profitable?The Industry Is the industry expanding or contracting? What is the outlook of the industry relative to the others in the economy? Will the company able to get support from the suppliers? What are the credit terms the suppliers offer? 15. ENT/ETR300 FUNDAMENTALS OF ENTREPRENEURSHIP BUSINESS PLAN Marketing Plan Products What products the company is planning to offer? What is the product concept? What are the unique or special characteristics of the products? Are these products potentially to generate more sales? Market Who are the customers of the company? What market segment are these customers in? Where is the target market? Will customer repurchase the products? What is the size of the target market? 16. ENT/ETR300 FUNDAMENTALS OF ENTREPRENEURSHIP BUSINESS PLAN Competitors Who are the competitors? Where are the competitors? Who are the major competitors? What are the strengths and weakness of the major competitors? What differences and similarities between our products andproducts of the main competitors? What strategy is planned to overcome competitors? Will it be new competitors in the market? How to monitor competitors? What is the targeted market share? How to penetrate and maintain the targeted market share? What strategy to increase the market share? What strategy to increase the sales? 17. ENT/ETR300 FUNDAMENTALS OF ENTREPRENEURSHIPBUSINESS PLAN Price What price to charge for the products? Does company has a price range for the products? How company set the price? Is the price competitive? Why customers willing to pay for the price? Promotion What promotional strategy to be adopted? Why the company plans to adopt the strategy? Do we have budget for these promotional activities. How much is the promotion budged? Is the strategy appropriate for our products? How are we going to monitor the effectiveness of these promotional activities? 18. ENT/ETR300 FUNDAMENTALS OF ENTREPRENEURSHIP BUSINESS PLAN Place How are we going to market our products? What is the most appropriate distribution channel tobe adopted? How are we going to deliver the products? Does company has any policy regarding on returnedgoods? How to maintain good customer relations? 19. ENT/ETR300 FUNDAMENTALS OF ENTREPRENEURSHIPBUSINESS PLANOrganizational Plan Does company has any policy regarding on recruiting and selecting new staff? Who are the key members of the management team? Do owners or partners have relevant experiences to the proposed project? What experiences do owners or partners of the company have? Who make decisions in the company? Who plans for the company? What jobs to be done? What skills and experiences needed to do these jobs effectively? Who will do these jobs? Who are the key staff needed? Are these staffs work full-time or part-time basis? How much remuneration for the administrative staff? Do staffs need training? What training do they need? How much the training will cost? How long the training will take? 20. ENT/ETR300 FUNDAMENTALS OF ENTREPRENEURSHIP BUSINESS PLANOperations Plan What are the operations processes involve in themanufacturing or producing of our products? Does company needs any customized infrastructureto facilitate the operations processes? What types and number of machineries andequipments needed? How much is the inventory for raw materials, semi-finished and finished goods are? How much is the inventory cost? 21. ENT/ETR300 FUNDAMENTALS OF ENTREPRENEURSHIP BUSINESS PLANFinancial Plan How much is the project cost? How much capital invested by each member or partner? How much is the total equity compared to the total projectcost? What is the source of financing? How we plan to pay back the financing? How the forecasted cash flow look? Is the proposed project profitable? What are the uses and sources of funds of the proposedprojects? How the forecasted financial performances look? What do financial performances tell us? 22. ENT/ETR300 FUNDAMENTALS OF ENTREPRENEURSHIPBUSINESS PLAN Conclusion Is the proposed project is viable to proceed? Have you justified the claims?Appendix Have you attached every supporting facts ordocuments in the appendix? 23. ENT/ETR300 FUNDAMENTALS OF ENTREPRENEURSHIP BUSINESS PLAN END OF MODULE 7