BUSINESSPLAN

COVERPAGE :Shouldbewelldesigned,impressiveandappealing.
TABLEOFCONTENTS :listofsubtopicsandcorrespondingpages
EXECUTIVESUMMARY:

Wesuggestthatyoumakeittwopagesorfewer.Includeeverythingthatyouwouldcoverinafive
minuteinterview.Explainthefundamentalsoftheproposedbusiness:
Whatisyourproduct?
Whoareyourcustomers?
Whoaretheowners?
Whatbusinessyouarein,
Whyyouareinit,
Whatyouhopetoaccomplish.
Describeyourbusinessintermsofwhereithascomefrom,
Whereitisnow,
Whereyouwantittogo,and
Howyouplantogetitthere.
Whatdoyouthinkthefutureholdsforyourbusinessandyourindustry?
Makeitenthusiastic,professional,complete,andconcise.Ifapplyingforaloan,stateclearlyhow
muchyouwant,preciselyhowyouaregoingtouseit,andhowthemoneywillmakeyourbusiness
moreprofitable,therebyensuringrepayment.Thisisacompletesummaryofyourbusinessplanand
shouldbereferredtoonoccasionbyyouandyourassignedBusinessOpportunitySpecialisttogeta
quickoverviewofyourplan.Youshouldpreparethesummaryafteryouhavecompletedallother
majorcomponents.

GENERALCOMPANYDESCRIPTION

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 Highlightingthemainframeworkofthebusinessplan.
Theregisterednameofthecompany,
Theregisteredname
tradingnamethe
Dateofincorporation,
Thephysicaladdressand
Contacts:includesallyourofficialtelephonenumbers,emailswebsites,andbranches.
ORGANIZATIONALSTRUCTURE
Yourbusinessorganizationalstructure,authoritylevelsandrelationshipsyourlinesofcommand.
KEYPERSONNEL
Indicationofyourkeypersonnelandmanagementteam.Theirqualifications,experiencesand
competencesinawaythatmarketsandassuresrobustcompanystrength,andindicatethattheir
cumulativecompetitivestrengthsthatdrivesthecuttingedgeofbusiness.
VISION
Acaptivatingpanoramicviewofyourselvesinthefuture.Thiscommunicatesyouroverallbusiness
goals,shapeandinspiringstrategicdirectioninfusedwithpassion,emotion,immensecreativityand
ambition.Thevisionstatementshouldnotnegenericbutcompanyspecific.
Canbeashortsentenceoraparagraphorbebrokendownintovariouscomponentsasfollowseg
CocaColaCompanygoesas:

OurvisionservesastheframeworkforourRoadmapandguideseveryaspectofourbusinessby
describingwhatweneedtoaccomplishinordertocontinueachievingsustainable,qualitygrowth.

People:Beagreatplacetoworkwherepeopleareinspiredtobethebesttheycanbe.

Portfolio:Bringtotheworldaportfolioofqualitybeveragebrandsthatanticipateandsatisfy
people'sdesiresandneeds.

Partners:Nurtureawinningnetworkofcustomersandsuppliers,togetherwecreatemutual,
enduringvalue.

Planet:Bearesponsiblecitizenthatmakesadifferencebyhelpingbuildandsupport
sustainablecommunities.

Profit:Maximizelongtermreturntoshareownerswhilebeingmindfulofouroverall
responsibilities.

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 Productivity:Beahighlyeffective,leanandfastmovingorganization.

MISSION
Yourassignmentwithregardstoyourcallreasonswhyyouexist.
Examplesofmissionstatementsegcocacola

Mission statement: A mission statement should succinctly summarize what

you do or what your aims are. Google's stated mission is "to organize the
world's information and make it universally accessible and useful."

Code of Ethics
Give the main highlights the dos and donts the
Code of ethics: A code of ethics or code of conduct expands even further on
the philosophy and the mission statement to deal with specific types of
situations and behaviors. Google, for example, lays out its policies on, among
other things, conflicts of interest, customer service, and confidentiality.

Ulrich continues, "There are dimensions of this identity: the philosophy being a
set of principles that govern work, the mission statement about why we work,
and code of ethics about our values in doing work. But they all try to position a
company's identity in the minds of those inside and outside the company."

OURMISSION

OurRoadmapstartswithourmission,whichisenduring.Itdeclaresourpurposeasacompanyand
servesasthestandardagainstwhichweweighouractionsanddecisions.

Torefreshtheworld...

Toinspiremomentsofoptimismandhappiness...

Tocreatevalueandmakeadifference.

AnotherexampleisthatofWorldVision:

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 OurMission:WorldVisionisaninternationalpartnershipofChristianswhosemissionisto
followourLordandSaviorJesusChristinworkingwiththepoorandoppressedtopromote
humantransformation,seekjustice,andbearwitnesstothegoodnewsoftheKingdomofGod.

GUIDINGPRINCIPLES/VALUES
Thesearelikeacompassthatguidesyourbehavior.egtheyarethebuildingblocksofyour
culturetheonlycapableandenablingvehicletoreachorattainyourvision.
Responsibility
Accountability
Integrity
Passion
Quality
Innovation
Diversityetc

COMPANYPHILOSOPHYItbringsoutwhatthecompanybelievesinanditsconvictions.
A company's philosophy is a distillation of its culture or ambience into a group
of core values that inform all aspects of its business practices. Having a strong
company philosophy is a good way to guide your employees at decision-making
crossroads, but it can also be a strong branding tool, and generally make your
workplace more congenial. "above and beyond the average level of service to
create an emotional impact on the receiver"

Culture: What you uniformly do this as united by the set of values

PRODUCTSANDSERVICESPRODUCTCATEGORIES
Displaythefullrangeandarrayofyourproductsandserviceshighlightingtheiruniqueness,or
differentiatingthemfromtherest.issuesofquality,cost,innovation,efficiency.Displaywithpride
andimmenseconfidence.

MARKETINGPLAN
Thisisoneofyourmostessentialandkeyareasofthebusinessplan.
Yourstrategytoapproachcompetition.
Yourmarketingresearchforbothproductandmarketingdevelopment
YourmarketingcommunicationsThisshouldshowyouintendtointerfacewiththemarket,
Yoursalesstrategiesandcustomercareculture.
OPERATIONALPLAN
Yourlocationalfactorsandadvantagesmustcomeout.

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 Yourprocurementandsupplychainlogistics,delivery,yourproductionofgoodsandservicesand
costminimizingstrategiesandimpactmaximizationissues,productionprocessesissuesshould
comeout

TQMYourtotalqualitymanagementsystemyourqualityassurance,guaranteesandcertifications
mustbehighlighted.

KEYSUCCESSFACTORS
Highlightyourgreatestcompetitiveadvantageswhichwillbeyourcorestrengthsfromwhichyour
businesswillbedriven.Thesecanincludeyourbrandstrengths,unsurpassablequality,leading
innovationandtechnologicalsuperiority,lowestprices,locationaladvantages,outstanding
managementorpeoplecompetencies,continuouslearningandgreatknowledgemanagementskills
etc.

OTHERCOMPETITIVEADVANTAGES.
Thesecouldincludeyourbusinessphilosophystrongconvictions/principlesthatacompany
believeshowitwillhandlevariousfunctionsofbusiness.

FINANCIALPLAN

ProjectedFinancialStatements
Thestatementoffinancialposition(formerlybalancesheet)
TheIncomestatement(formerlytheprofitandloss)statementofcomprehensiveincome
Statementofstockholderequitystatementofchangesinequity.
Thestatementofcashflow.
Thenwriteafewnotestothefinancialstatementstobackupyourstatementsandlinkupwithyourwriteup

IndicateBREAKEVENPOINT:
Thepointatwhichyoubegintobreakoutofcostsandstartmakinganormalprofit.Yourcash
flowswillguideyou.Afewnotestothefinancialstatementshouldbewrittenasaccompanying
explanatorynotes
EXITSTRATEGY
Anexitstrategygivesabusinessownerawaytoreduceoreliminatehisorherstakeinthe
businessand,ifthebusinessissuccessful,makeasubstantialprofit.Ifthebusinessisnot
successful,anexitstrategyenablestheentrepreneurtolimitlosses.Theoptionsarecouldbe
liquidateandclosebusiness,tosellorgivetocharity,publicofferings,strategicacquisitionsand

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 managementbuyoutswillentailrelievingtheownerofownershipresponsibilitiesandgivingup
businesscontrol.

CONCLUSION
Havingsaidalltheabove,indicateyouroverconclusionwithrespecttosummationoftheabove.
Yourviewandvoiceshouldcomeout.

USES OF A BUSINESS PLAN:

1. STRATEGIC ALLIANCES:

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 An entrepreneurial firm may need to form alliances with other firms to reach new markets,
develop new products, or create common facilities. A business plan can help convince a well-
established retailer or distributor to commit to the start-up. The exhibited overall company
direction in a business plan helps get support of stake holders such as customers and suppliers,
government and other relevant public regulatory entities.
2. FOR SECURING FINANCIERS AND OR PROJECTS FUNDERS ALIKE
A banker obviously concentrates on the ability of the business to repay the debt and on the
availability of collateral or other securities. Banks look for at least some specific issues to be
addressed in the business plan. For example, a bank needs projected balance sheets and profit
and loss accounts for the first five years.

3. FOR ATTRACTING OTHER STRATEGIC INVESTORS SUCH AS JOINT VENTURES, ANGEL

INVESTORS
EQUITY FUNDING: A venture capitalist or an angel investor will very rarely commit an
investment to a start-up without perusing its business plan. The venture capitalist will primarily
use the business plan to gauge risks and forecast growth prospects.

4. FORGING EMPLOYEE COMMITMENT, ALIGNMENT AND MOTIVATION.

HELPS IN RECRUITMENT A good business needs support from experienced top-level
employees. A business plan will help them understand what they are getting into. Of
course, showing the business plan to the rank and file is not necessary.

5. GUIDANCE AND POINT OF REFERENCE FOR EMPLOYEES AND MANAGEMENT

The business plan but it will always remain an important reference point. The plan can serve as a
guide or manual to help in business and strategy formulation and keep on focus all corporate
efforts towards the vision.

6. GUIDE PRIORITIES IN RESOURCE.

Establish strategy and allocate resources according to strategic priority. You can find more
information about growing your business with a business plan by reading.

TYPESOFBUSINESSOWNERSHIP/FORMATIONS

Soletrader/soleproprietor
Partnership
Limitedcompanies

SOLETRADER/SOLEPROPRIETOR

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 Asoleproprietorshipisabusinessownedonepersonoranindividualwhohasfullcontrolofthe
operationsofbusiness.

Theyalsoownalltheassetsofthebusinessandanyprofitthatitmakes.

Howevertheyarealsoresponsibleforallthedebtsandliabilitiesthebusinessaccrues.

Butgenerallyspeakingtheiraccountingrequirementsarelessnumerousthanthoseofalimited
company.

ADVANTAGESOFASOLETRADER

Soletradersbenefitfromthefollowingadvantages:

THEEASEwithwhichabusinesscanbesetup

CONTROLSoletradersmaintainfullcontroloftheirbusiness.Greaterfreedomandfull
leverageinrunningtheoperationwithouttheinterferenceofothers.

PROFITRETENTIONSoletradersretainalltheprofitsoftheirbusiness.thereisfull
motivation

CONFIDENTIALITYOFCOMPANYINFORMATIONInformationaboutsoletradersis
keptprivate,unlikethatoflimitedcompanieswhichisnecessarilymadepublicafterregistration
withRegistrarofCompanies.Noorlimiteddisclosureofcompanydata.

SPECIALISTFOCUS.Oftenasmallbusiness,soletraderscanofferamorepersonalservice
withlocalrootsandties.Thiscanbemoreappealingtopotentialcustomersinthelocal
community.

DECISIONMAKINGBecausethereisnoneedtoconferwithotherdecisionmakers,sole
traderscanmakedecisionsquicklyandactonthemswiftly,providingfortheneedsoftheir
customers.

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 DISADVANTAGESOFASOLETRADER
Liabilitysoletradersarenotseenasaseparateentitybythelaw.Therefore,theyaresubjectto
unlimitedliability.Thismeansifthebusinessgetsintodebt,thebusinessownerisliable.Inthe
worstcase,thismaymeanapersonriskstheirhome,personalsavingsandanyotherassetsthey
havebothinandoutsideofthebusiness.

Financesoletradersoftenfinditdifficulttoraisefinancetofundtheirbusiness.Theyoften
haveaheadachetoraisefinanceforexpansionofbusiness.
Businessexpansionchallengessoletradersoftenfailtotakeadvantageofeconomiesofscale
inthesamewayaslimitedcompaniesandlargercorporations,whocanaffordtobuyinbulkand
benefitfromeconomies(discounts)ofbulkprocurement.
LimitedskillsbaseOfteninmarketingandpricingandfinance.
Decisionmakingalldecisionsmustbemadebythesoletraderandtheprobabilityofserious
errorsinbusinessishighersincethereisnoroomforhelpbyothers.Sothesuccessorfailureof
thebusinessrestsononeperson.
PARTNERSHIPBUSINESSMODEL

Apartnershipiscommonlyformedwheretwoormorepeoplewishtocometotogethertoforma
business.Perhapstheyhaveacommonbusinessideathattheywishtoputtothetestorhave
realisedthattheirskillsandtalentscomplimenteachothersinsuchawaythattheymightmakea
goodbusinessteam.

Beingapartnership,thebusinessownersnecessarilysharetheprofits,theliabilitiesandthe
decisionmaking.Thisisoneoftheadvantagesofpartnership,especiallywherethepartnershave
differentskillsandcanworkwelltogether

Familyandfriendsgointobusinesstogetherandendupfallingoutonapersonalorbusinesslevel
anditallendsbadly.

ADVANTAGESOFPARTNERSHIP

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 Capitalgreatpartnershipnumberthegreatertheamountofraisingbusiness.Thiswillallow
betterflexibilityandmorepotentialforgrowth.Italsomeansmorepotentialprofit,whichwillbe
equallysharedbetweenthepartners.

FlexibilityApartnershipisgenerallyeasiertoform,manageandrun.Theyarelessstrictly
regulatedthancompanies,intermsofthelawsgoverningtheformationandbecausethepartners
havetheonlysayinthewaythebusinessisrun(withoutinterferencebyshareholders)theyare
farmoreflexibleintermsofmanagement,aslongasallthepartnerscanagree.

SharedResponsibilityduetoagreaterskillsbase.

DecisionMakingPartnerssharethedecisionmakingandcanhelpeachotheroutwhenthey
needto.Morepartnersmeansmorebrainstosolvebusinessproblems.

DISADVANTAGESOFPARTNERSHIP

Higherpotentialforconflictsanddisagreements

LiabilityOrdinaryPartnershipsaresubjecttounlimitedliability,whichmeansthateachofthe
partnerssharestheliabilityandfinancialrisksofthebusiness.Thiscanbecounteredbythe
formationofalimitedliabilitypartnership,whichbenefitsfromtheadvantagesoflimited
liabilitygrantedtolimitedcompanies,whilestilltakingadvantageoftheflexibilityofthe
partnershipmodel.

TaxationOneofthemajordisadvantagesofpartnership,taxationlawsmeanthatpartnersmust
paytaxinthesamewayassoletraders.

ProfitSharingPartnerssharetheprofitsequally.Thiscanleadtoinconsistencywhereoneor
morepartnersarentputtingafairshareofeffortintotherunningormanagementofthebusiness,
butstillreapingtherewards.

WHATISALIMITEDCOMPANY?

ALimitedLiabilityCompany,quitesimplyisacompanywhoseliabilityislimited.The
operatorsofbusinessrunwithoutrisktoapersonalwealth.Peoplewhohaveinvestedinthe

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 business(theshareholders)areonlyresponsibleforanycompanydebtsuptotheamountthat
theyhaveinvestedandnomore.EssentiallyaLimitedCompanyisseenasanentityinitsown
right,whichcanbesubjecttolegalaction.Ithasalegalpersonaitcansueandbesued.

AdvantagesofaLimitedCompany

TheobviousadvantageofaLimitedLiabilityCompanyisthefinancialsecuritythatcomeswith
business.TheCompanysshareholderswillonlybeliableforanydebtthecompanyaccrues
accordingtothelevelsoftheirowninvestmentandnomore.Thiscanprovideacomfortable
feelingofsecurityforinvestorsintheCompany.

SeparateEntityDuetoitsverynature,alimitedcompanyisdeemedtobeaseparatelegal
entityfromitsowners.

Severaladvantages,includingthefactthatthecompanywillexistbeyondthelifeofits
members.Iftheyretireordie,thecompanywillcontinuetoexistandoperate.Thisensures
securityforemployeesandothermembersandalsoisanadvantagewhichotherlegalformsof
businessarenotsubjectto.

TaxationandTaxAdvantagesLimitedCompaniesareonlytaxedontheirprofits

OwnershipandControlClearprofessionalstructuresformanagement.BoardChairman,
Boardofexecutiveandnonexecutivedirectors,CEOandhismanagementteamintheirvarious
functionsandclearlydelineatedauthoritylevels.

EmployeeShareholdersInsomeinstancesemployeescanpurchaseshares(orbegrantedshares
viaacompanyshareownershipscheme)andbecomeshareholdersofthecompany.Thisisgood
asitrewardstheemployeesfortheirwork,providingextramotivationbeyondameresalary

ChallengesofaLimitedCompany

CostSomepeoplewillhaveyoubelievethataLimitedCompanyisexpensivetosetup.

ComplexAccountsTherearemorecomplexandrestrictiverulesgoverningtheaccountsand
bookkeepingofLimitedCompaniesthansoletraders
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 ComplexityofoperationsgoingglobalMultinationalcorporationsinmulticultural
environments

Notes Prepared by J J Makota to Facilitate Learning on Entrepreneurship @ undergraduate

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