Project Planning and

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Project Planning and Project Management in
Entrepreneurship
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Businesses dont plan to fail, they just fail to
plan Old Business Adage
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How A Business Is Formed and Operates
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Well Developed Plan Can

• Attract investors to invest in the business
• Guide the owner and managers in operating the
  business
• Give direction to and motivate employees
• Provide an environment to attract customers and
  prospective employees

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However, many business owner neglect planning,
because

• Day-to-day activities leave them little or no
  time for planning
• They fear the problems and weaknesses planning
  may reveal
• They lack of knowledge of how to plan
• They fell that future changes cannot be planned
  for

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Planning is the process of setting objectives and
determining actions to reach them
What is Planning?
It is the first step in performing a series of
managerial functions for it sets the future
course of action for all aspects of the business.
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How Planning Relates to Other Managerial Functions
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STRATEGIC PLANNING

• Strategic Planning provides comprehensive
  long-term direction to help a business accomplish
  its mission

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Strategic Planning
Strategic Planning
Mission
Strategies
Objectives
Whole Firm
Functional Area
Whole Firm
Functional Area
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SWOT Analysis

• A SWOT (Strengths, Weaknesses, Opportunities and
  Threats) is one tool that most strategic planners
  use to scan the businesss environment and base
  objectives.
• It allows the owner to identify new markets and
  to prepare for perceived downturns or
  competitions
• A study is made of the Opportunities and Threats
  in the external environment and the Strengths and
  Weaknesses in the internal environment

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OPERATIONAL PLANNING
Operational Planning involves setting policies,
methods and procedures, and budgets, which
together form the basis for the other part of the
operational method and planning
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Planning to Operate the Business

• Choosing the location
• Planning operations and physical facilities
• Developing sources of supply for goods and
  materials
• Planning your human resource requirements
• Setting up the legal and organisational structure
• Determining your approach to the market
• Establishing an efficient record system
• Setting up a time schedule

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FINANCIAL PLANNING
It Involves determining what funds are needed,
where they can be obtained, and how they can be
controlled and including

• 1. Estimating income and expenses
• 2. Estimating initial investment required
• 3. Locating sources of funds.

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Some of the Most Important Types of Plans and
Planning Functions
continued
Strategic planning

• TYPES OF PLANS
• Mission The long-term direction of the business.
  
• Objectives Shorter-term ends to help achieve the
  mission.
• For total firm
• For functional area
• Strategies Means to achieve an end, or courses
  of action needed to achieve objectives.
• For total firm
• For functional area

• EXAMPLES
• To provide financial security at low cost.
• Earn a 20 return on investment in 1997.
• Increase market penetration by 25 by 1998.
• Establish procedures to control costs by 1997.
• Use 1 percent of sales to improve and expand
  service.

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Some of the Most Important Types of Plans and
Planning Functions (continued)
Operations planning

• EXAMPLES
• Personnel policy Promote from within, giving
  preference to promotions for present employees.
• Employee selection procedure Complete
  application form, test, interview, investigate,
  select.
• Cash budget For planning use of money.

• TYPES OF PLANS
• Policies Guides to action that provide
  consistency in decision making, particularly in
  repetitive situations.
• Methods and procedures Prescribed manner of
  accomplishing desired output.
• Budgets and standards Plans for future
  activities using measures for control.

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Strategic Umbrella
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Example of How Objectives Can Be Set

• FIRM'S OBJECTIVES 2005 2006 2007 2008
• Total net profit (income) after
  taxes _______ _______ _______ _______
• Return on investment (ROI) (net income
  _______ _______ _______ _______
• after taxes/total assets)
• Return on equity (ROE) (net income after
  _______ _______ _______ _______
• taxes/equity)
• Total sales volume (units) _______ _______ _____
  __ _______
• Total sales volume () _______ _______ _______ _
  ______
• Return on sales (ROS) (net income after
  _______ _______ _______ _______
• faxes/sales)
• To attain a ____ percent share of market by the
  end of 2006.
• To have a ____ percent debt-to-equity ratio in
  the capital structure initially, declining to
  ____ percent debt-equity of the end of 2007,
• To develop a new product by the end of the year
  2008.

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Competitive Edge

• A COMPETITIVE EDGE is a particular characteristic
  that makes a firm more attractive to customers
  than its competition.
• If a firm has especially good resources that are
  effectively used, it can have an advantage over
  its competitors.
• Human resources are the personnel that make up
  the business work force.
• Physical resources are the buildings, tools and
  equipment, and service and distribution
  facilities that are needed to carry on the
  business.
• Financial resources include the cash flow,
  debtcapacity, and equity available to run
  operations.

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What Is Profit?

• Total Amount of Revenue (sales)
• - Total Amount of Expenses (costs)
• NET PROFIT (or loss)

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The Role The Business Plan in Strategic and
Operational Planning

• A Business Plan is a formal plan to serve a s a
  tool for attracting the other components of the
  business formation package, including people and
  money

It provides a detailed blueprint for the
activities needed to finance the business,
develop the product, market it, and otherwise
manage the new business
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How to Prepare a Business Plan

• Survey consumer demands for your product(s) and
  decide how to satisfy those demands.
• Ask questions that cover everything from the
  firm's target market to its competitive position.
• Establish a long-range strategic plan for the
  entire business.
• Develop short-term, detailed plans for all those
  involved with the business, including the
  owner(s), managers, and employees.

continued
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How to Prepare a Business Plan (continued)

• Plan for every part of the venture, including
  operations, marketing, general and administrative
  functions, and distribution.
• Prepare a plan that uses staff time sparingly.

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Sample Outline of A Business Plan

• C. MARKET
• 1. Prospective customers
• 2. How many there are
• 3. Market growth rate
• 4. Competition (list three to six com-petitors
  by name and describe)
• 5. Industry trends
• 6. How the firm will compete
• 7. Estimated market share
• a. In one year
• b. In five years

• A. COMPANY
• 1. Who and what it is
• 2. Status of project/firm
• 3. Key goals and objectives
• B. PRODUCT/SERVICE
• 1. What it is
• 2. How it works
• 3. What it is for
• 4. Proprietary advantages

continued
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Sample Outline of A Business Plan (continued)

• D. OPERATIONS
• 1. How product/service will be
• manufactured/provided
• 2. Facilities/equipment
• 3. Special processes
• 4. Labor skills needed
• E. CHANNELS OF DISTRIBUTION How product/service
  will get to end users

• F. MANAGEMENT TEAM
• 1. Who will do what
• 2. Their qualifications
• 3. Availability
• G. SOURCES AND APPLICATION OF FUNDS
• 1. Present needs
• 2. Future needs