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The Business Plan

Purpose of a business plan


to establish the viability of your project
To put your idea into writing
To act as a map for your business
assist with management control
to secure finance
to communicate plans to third parties

The Feasiblity Study


The Feasibility study is a creative, objective and rational
process whereby marketing and financial data are collected
assimilated and analysed.
The purpose is to decide whether to proceed with the
project under review, define its optimum scope and
quantify its prospects for financial success or failure with
reasonable accuracy.

The Feasibility Study


It involves researching an idea, establishing
if a market exists, projecting revenue and
costs, identifying sources of finance,
materials, location and analysing the results.
Writing the business plan translates these
ideas into concrete realities.

Conducting a Feasibility Study


1. Data Collection

Interpret Results

work out size and location of market


Build a profile of customer needs
Forecast sales and revenue
Understand competition
decide on business form
establish location and equipment needs
establish a price

Interpret Results
The feasibility study answers the question
is the business viable?
It provides all the information for the
business plan.
The plan outlines how the business will be
set up and how it will operate

Writing the Business Plan


DEFINITION
A business plan is a formal document that
describes a business and its operating
environment, its short and long term objectives
and the intended means of achieving those
objectives

Objectives
Selling document to potential investors
Establish the viability of project
To gain assistance from government agencies
Act as an aid to management by helping to
formulate the companys business strategy
and detailed business plans
Monitoring and assessing CO's future
performance

Executive Summary
First to read last to be written
Less than one page
Summarise the key points of your business
Explains how xyz company came to be
The products/services we intend to make
describes the market
Shows how we will reach that market
costs the product/service
includes operating budgets and cash flow
requests grant aid of xxk based on equity already
committed of xxk and loans agreed of xxk

Introduction & Background


Set out basic information that reader will
want to know about your business
Purpose of the plan
business name and contact details
If business is in operation?
Objectives

Tips on Writing the Business


Plan
Own the content
Be realistic
Clear objectives
Keep plan brief and to the point
base it on research and fact
present to communicate not impress

Tips on Writing Business Plan


Three stages to writing plan
Thinking(50% of allocated time)
Writing
Editing
Structure
Depend on who your target audience is
Standard format can be adapted to suit your particular
circumstances
Product/Service Range

Project outline/ Business and


its management

History and position to date


Current mission
Objectives short-term
Objectives long-term
The current key management team
Background of owner/ manager/ partners and managers
education
work experience
skills
Outline employment prospects
legal and capital structure
Professional advisors

Products/Services

descriptions
Readiness for market of new products/services
Development cost estimates
Barriers to entry/proprietary position
Comparison with competition(key competitive
advantage)
Guarantees and warranties
Future potential
Sources of supply if not manufacturing

Marketing and marketing


strategy

Description of customer need


Market and segment size and growth
Target groups
Customer decision criteria
competitors
Key competitive advantages
SWOT

Marketing Strategy

Pricing policy
Promotional plans
Choice of location and premises
Distribution channels
Anticipated mark-up
PEST that affect strategy
Sales forecasts

Production

Make or buy considerations


how it is made / delivered
Experience you have of process
Facilities needed
What equipment you need
Quality assurance
Source supplies

Management and staffing


specific management roles for existing and
planned staff and general organisation of the
business
Strategies for retaining and motivating key staff
Planned recruitment and selection
Reward packages and links with performance
Training and development plan
Appraisal system

Financial

Projected profit and loss account


projected balance sheet
Projected cashflows
Assumptions underlying financial data
Summary of financial performance ratios
Funding Proposal

Funding Proposal
Funding proposal
I need xxxk made up as follows, I have
xxxk of my own, I have secured xxk
more from shareholders/ grant agencies
etc.,, I need xxk from you please

Appendices

Management team CVs


Names and details of professional advisors
Technical details and drawings
Details of patents and copyrights
Audited accounts
consultants reports
Orders on hand and enquiry status
Detailed market research data and findings

Editing

Spelling
Grammar
Page numbering
Chapter section numbering
Logical structure
Jargon
Length
Type size and style

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