A Business Plan for the Entrepreneur

What Is A Business Plan?

A business plan is a written description of your business's future. That's all there is to it -a document that describes what you plan to do and how you plan to do it.

Why bother with a business plan?Reasons may include: giving businesses a clear picture of the various

stages they need to go through in order to be successful;

setting goals and objectives for the business, in both the short and long term;

ensuring the monitoring and reviewing of progress is made more straightforward;

persuading other stakeholders to, for example, finance a business, both as it is starting up and then as it is growing.

What Do I Have To Do?You will need to understand:

why businesses create business plans,

the different parts of a business plan

the constraints that can affect the successful implementation of a business plan.

Areas CoveredAO1 – Why do business create plans, what

information do they contain and what are the constraints that can impact on a successful implementation.

AO2 – Targeting your plan

AO3 – Analysis of primary and secondary research

AO4 – Critical evaluation of your plan

AO1There are 9 marks available for this section:“You demonstrate a clear and comprehensive

understanding of: the reasons behind creating a business plan, the different parts of a business plan the constraints that can impact on the

successful implementation of a business plan;”To get high marks in this section, your evidence

must display both breadth and depth.

AO2There are 14 marks available in this section:

“You target your business plan to the specific needs of your new

enterprise.”

AO3There are 12 marks available in this section:

“Your analysis and interpretation of your data is thorough and comprehensive and there is an extensive focus on targeting your research and analysis into the development of your business plan; your synthesis of material is comprehensive, with frequent demonstration of integrated and strategic thinking;”

AO4There are 15 marks available

“Your critical evaluation of how, and in what ways, constraints may impact on the successful implementation of your business plan is comprehensive and in-depth and your research and analysis, resulting in reasoned, appropriate, logical conclusions; you demonstrate clarity, coherence and fluency with effective and confident use of appropriate business terminology.”

Information Within the PlanBusiness plans are usually divided up into 5

key sections:Preliminary informationMarketing planProduction planFinancial planHuman resources plan

Marketing Plan

Businesses need to make informed judgements about the likely sales-levels of products and services.

You will need to know and understand how businesses analyse the market in which they operate.

Marketing PlanYou will need to understand:The use of primary data in market research; The use of secondary data in market research; Factors affecting the demand for a particular

product or service; Methods of identifying and analysing competition; Use of marketing models: – SWOT (Strengths,

Weaknesses, Opportunities and Threats); – PEST (Political, Economical, Social and Technological) ; – Ansoff matrix; – product life-cycle; – Boston matrix

Within the marketing plan you need to discuss the following:

Primary researchSecondary research

Primary ResearchField (usually looked at secondly)Important because you know its up to date,It meets the needs of your businessGenerally five kinds of primary research

ObservationExperimentationSurveysQuestionnairesFocus groups

Needs to be qualitative and quantitativeQualitative is about how people behaveQuantitative concerned with facts and

figures.

Do you drink coffee? Yes No

How often do you drink coffee per day?

1 2 3 4 5 6

How much would you pay for a cup of coffee

£0.50-£0.99

£1.00 - £1.49

£1.50-£1.99

Strongly Agree

Agree Neither Disagree Strongly Disagree

Do you prefer organic coffee?

Is price important?

Quantitative questions

Example of Likert Scaling

Secondary ResearchAlso known as desk researchExplain that you might refer to this firstWhere might you get some of this information?

Government statistics – dti, ons, statisticsMarket research companies – Mintel, Mori, CIMConsumers’ associations – Which, Trading Standards,

national Consumer CouncilNewspapers – Times, Telegraph, Economist, Trade

magazinesNational and international agencies – World bank,

International Trade Centre and International Labour organizations

Competitors information – websites, catalogues, loyalty card

Secondary Data

Legislative

changes

Population

changes

Population

changes

Costs of distributio

n

Industrial developmen

ts

Spending habits

Effectiveness of

promotions

Factors affecting the demand for a product or serviceQuality of the good or service – niche market,

or mass produced lower end of market i.e. hand made wedding dress or off the peg

Product range and its image, i.e. clothing and or accessories, Apple, Jack Wills etc

Essential or Luxury. Is it a special occasion or linked to other festivals or special occasions (bread, xmas trees)

Lifestyle of customers. Related to sport, healthy living, hobbies or interests, commonwealth inspired people to do more sport

Income of potential customers – more disposable income we have the more we buy!

After sales purchase – guarantees and warranties

Level of availability- online, high streetLevel and type of competition – what makes a

customer come to you rather than your competitors

SWOT Analysis, remember its only as good as the info you put in it. SW – inside the business, OT outside

PEST – explain how these will affect your business

Ansoff’s MatrixProduct Life cycleBoston Matrix

Boston matrix

Ansoff’s Matrix

Product Life cycle