BUSINESS PLAN

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BUSINESS PLAN
By Elieser E.N. Moroña, DTI Region 5
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STEPS IN STARTING A BUSINESS
Consider other Factors
Product/Service ID
Self Analysis
Determine Financial Requirements
Write Business Plan
Secure Financing
Secure Registration Permits
Hire Train Personnel
Choose Location
START
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What is a Business Plan?
an operational plan that defines actions what to
do as well as how and when to do it.  Many
entrepreneurs use their business plan for the 
critical start-up and expansion so that they will
stay both on target and within the budget. It
consists of establishing goals for the business
and completing the procedures to reach these
goals.
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In developing the plan, you should first ask
yourself these questions

• What would I like the business to become a year
  from now?
• What changes are taking place in the business and
  how should I prepare for it?
• How can I attain my goals?
• What timetable should I follow in accomplishing
  the plan?

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Importance of a Business Plan

• Serves as
• - Blueprint /Roadmap for building an enterprise
• - Vehicle for describing the goals in
  business (why goals are
• economically and technologically
  feasible)
• Means to
• Delineate individual responsibilities
• Project sales, expenses, and cash flows
• - Explain to employees what is expected of
  them
• - Improve company performance
• - Assists managers in decision making
• - Plan for new product development
• - Raises capital for a a business or securing
  capital

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What is an Effective Business Plan

• Rigorous standards in evaluation of
• B. P. because of many business risks involved
• Critical to understand how the plan is read by
  the investors
• Turn on investors?
• Turn off investors?
• Know-basis of investors evaluation
• Fact Only A and A plans are acceptable

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Thus, a B. P. is not merely a report that is
proposed and then forgotten and left on the shelf
to collect dust. Rather, it is a working
document that entrepreneurs should use (weekly or
monthly basis) to ensure continuity or success in
business
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The preparation of a B. P.makes a better
entrepreneur and ensures business success
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General format of a Business Plan I. 
INTRODUCTION II.  SUMMARY OF THE BUSINESS
PLAN III.  PROPONENT, MGT. PERSONNEL IV. 
MARKET FEASIBILITY V.   PRODUCTION VI. 
FINANCIAL FEASIBILITY
DETAILED FORMAT
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Basic Steps to Follow in Business Planning
ID Material Rqmt Supply Source
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Identify Your Competitors
State Your Objectives
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Consider Your Pricing Policy
ID Equipment Process to Use
Describe Your Business
Determine Your Marketing Methods
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Describe Your Product or Services
Prepare Sales Forecast
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Determine Your Key Personnel
Identify Your Potential Markets
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Prepare Budget
Set Your Plan to Work
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• QUIZ

1.  How do you put a giraffe into a refrigerator?
THE CORRECT ANSWER IS Open the refrigerator,
put in the giraffe and close the door. This
question tests whether you tend to do simple
things in an overly complicated way.
2. How do you put an elephant into a refrigerator?
WRONG ANSWER Open the refrigerator, put in the
elephant and close the refrigerator.
CORRECT ANSWER Open the refrigerator, take out
the giraffe, put in the elephant and close the
door. This tests your ability to think through
the repercussions of your actions.
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3.    The Lion King is hosting an animal
conference. All the animals attended
except one. Which animal did not attend?
THE CORRECT ANSWER IS The elephant. The
elephant is in the refrigerator. This tests your
memory. OK, even if you did not answer the first
three questions correctly you still have one more
chance to show your abilities.

• There is a river you must cross. But it is
  inhabited by
• crocodiles. How do you manage to cross it?

THE CORRECT ANSWER IS You swim across. All the
crocodiles are attending the Animal Meeting.
This tests whether you learn quickly from your
mistakes.
According to Andersen Consulting Worldwide,
around 90 of the professionals they tested got
all questions wrong. But many pre-schoolers got
several correct answers. Anderson Consulting
says this conclusively disproves the theory that
most professionals have the brains of a four year
old.
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Coming together is a beginning, staying
together is progress, and working together is
success.
Henry Ford
- THANK YOU -
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2a. Come-Up with Business Idea
Factors to consider..

• INTERNAL FACTORS EXTERNAL FACTORS
• Personal interest ? government
  support
• Knowledge/talent assistance
• Training/work experience ? tax incentives
• Other considerations like ? financing
• income, employment ? business
  growth rate
• service, etc ? other factors

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2a. Come-Up with Business Idea
Factors to consider..

• INTERNAL FACTORS EXTERNAL FACTORS
• Personal interest ? government
  support
• Knowledge/talent assistance
• Training/work experience ? tax incentives
• Other considerations like ? financing
• income, employment ? business
  growth rate
• service, etc ? other factors

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2b. Choosing the Line of Business
Product Industries
Process Industries
Manufactured products intended either for mass
market or individual customers demand. Examples
are garments, toys, shoes, canned goods, (for
mass market) precision instruments for
industrial use, made to order furniture (as
specialized products)
Manufactured products intended either for mass
market or individual customers demand. Examples
are garments, toys, shoes, canned goods, (for
mass market) precision instruments for
industrial use, made to order furniture (as
specialized products)
Service Industries
Sub Contracting Industries
Service enterprises include repair and
maintenance shops, printing machine shops, food
catering, Beauty parlors, dress and tailoring
shops, recreation estabs. (like bowling alleys
and billiard halls), and entertainment
enterprises (such as theaters, disco and pub
house). Retail trading is one of the most
common type of service business
Manufacture of product components or parts for
other bigger companies. Bigger companies find it
faster cheaper to sub contract. Drawback is
if small company is totally dependent on one big
principal or contracting company
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BUSINESS PLAN OUTLINE
Executive Summary I. Description of the
Business A. Type of Business B. Status of
Business C. Profitability Potential D. Business
Days/Hours E. Uniqueness of Business F.
Contract Terms II. Description of Market A.
Demographics B. Size C. Market Share D.
Potential Growth E. Satisfying Market F.
Competitive Pricing G. Pricing Determination H.
Advantages
III. Description of Competition A. Five
Nearest Competitors B. Comparison C.
Competition Sales Trends D. Similarities
Dissimilarities E. Strengths /or
Weaknesses F. Insights IV. Location of
the Business A. Address B.
Physical Features C. Leased or Owned
D. Terms E. Neighborhood F. Zoning
G. Other Businesses H. Location
Considerations
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BUSINESS PLAN OUTLINE, contd.
V. Description of Management A.
BackgroundB. Management ExperienceC.
EducationD. Personal DataE. Operational
Experience In This BusinessF. Management
Experience In This BusinessG. Reporting
ResponsibilitiesH. SalariesI. Other
ResourcesJ. Financial Information VI.
Personnel A. Five Year Projection B.
Skills C. Labor Pool D. Full/Part
Time E. Wages F. Competitiveness
G. Training
VII. Business History A. Balance Sheets --
3 Years B. Income Statements -- 3 Years
C. Tax Returns D. Sales Trends E.
Explain Trends VIII. Financial Data A.
Source Uses of Funds      (Listing of
funds by major category) B. Capital
Expense B1. Capital Equipment List
B2. Renovations B3. Inventory
B4 Working Capital
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BUSINESS PLAN OUTLINE, contd.
C. Pro-Forma Balance Sheet 3 Years Current
Asserts Fixed Assets Current Liabilities
Fixed Liabilities Net Worth D. Pro-Forma
Cash Flow First Year -- Detail by Month
Notes of Explanation E. Pro-Forma Cash Flow
Three Year Summary Notes of Explanation
F. Income Projections Three Year Summary
Notes of Explanation G. Financial Analyais
Break-even Analysis R O I Payback
Period Profit Margin Ratio
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How to Turn On Investors/Banks/ Clients

• It must demonstrate the ff. features
• 1. A clear definition of the business - VMG
• what business are you in? what is the product or
  service what is the industry who, where, what
  is the target market
• Investors will always look for something extra
• 2. What is the industry should have growth
  potential /corridor syndrome / riding the growth
  curve/ innovative products