INTRODUCTION

BUSINESS PLAN

Business Plan
A business plan, in its simplest form, is

important for starting a business as

blueprints are for building your house.
A business plan will lay out the direction for
the future of your company and begin to
establish standards for success.
A business plan should define how you
would like to operate your business. This
includes describing the management team,
the marketing strategy, and the methods in
which you will interact with customers. The
definition should be clear but flexible.
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Need for Business Plan

Business plans are developed for many

purposes. One company might be looking for

funding from investors
Another company might be looking for a loan
from a bank
Your company might just need to plan out the
companys strategy to make sure it is successful.
Whatever the case, every business needs a
business plan
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Need for Business Plan

To Attract Investors.

To
To
To
To
To
To

See If Your Business Ideas Will Work.

Set Up Milestones
Learn About the Market.
Secure Additional Funding or Loans
Determine Your Financial Needs.
Monitor Your Business.

ANATOMY OF
BUSINESS PLAN

Executive Summary
Single most important part of business plan
Highlights the important aspects of business
Summarizing the key points of business
Busy investors and lenders start reading the

executive summary to get an understanding

of the business quickly.
Overall it provides a brief snapshot of the
business

What to be conveyed in the

Executive Summary
The basic business concept
The through plan of the business itself
The capability of the management
The existence of the market
Significant competitive advantages
Realistic financial projections
The chance of the investors and the lenders

to make money

Two types of Executive

Summary
1. The Synopsis Summary
It simply relates in abbreviated fashion, the
conclusions of each section of the completed
business plan.
It covers all aspects of your business plan
and treats each of them relatively equally,
although briefly.
Adv - It is easy to prepare and less dependent
on a talented writer.
Dis -Adv The tone of a synopsis Summary
tends to be rather dry.

Two types of Executive

Summary
2. Narrative Summary

The narrative summary is more like telling

the reader a story.
It can convey greater drama and excitement
in presenting the business.
It communicates the necessary information
and creates enthusiasm.
It is useful for businesses that break new
ground, either with a new product, new
market or new operational techniques that
requires explanation.

Writing the Summary

Clear writing pays off in the executive

summary and it makes the difference between

a plan being considered or being discarded.
If the writing ability is not sure hire a

professional or seek the help from friends and

relatives.

Length and Design of the Summary

The great advantage to the reader of the

Executive summary is that it is short.

It should be read in five minutes and should
not exceed two or three pages.
Use white space to make the page less
intimidating.
Bullet points can also be used in the
summary.
Make little provisions for visual considerations
since it makes the plan more inviting.

Company Name
There may be number of different names

including

Your own name

The Legal Corporate or Company name
A dba (doing business as)
Brand name
Model name
Subsidiary company name
Domain name

Company Description
It informs the basic details of the business.
The Company Description is relatively simple

for the existing businesses.

It gives details of legal status, ownership,
products or services, company mission and
mile-stones achieved to date.

Business Location
Location of the Companys headquarters.
Main place of business and the branch

locations.
If location not decided, indicate the
whereabouts of your intended operation.

Companys Objectives / Statement

of Mission
The Companies describe the main goal of

their internal planning process as their

Philosophy of mission.
The Mission Statements are the principles and
objectives that guide all other aspects and
activities of the business.
One statement should encapsulate the nature
of the business, business principles, financial
goals. Corporate culture and how the
company to be viewed in the market place.

Legal Issues
The type of legal entity to choose for the

company (Sole proprietary or partnership

or Pvt or public limited)
Incorporated companies provide greater
protection for the personal liability.
Incorporated companies should decide
their form, the state in which it will be
incorporated, the number of shares to be
issued.
Licensing, trademarks, patents, copyrights
also to be decided.

Products and Services

Technical, complicated, innovative products

need to be explained in detail to motivate the

potential funders.
Describe the nature of products or services .
Also indicate the future products or services
planned.

Management/Leadersh
ip
The name of the chairperson, Board of

Directors, President and chief executive

officers to be mentioned.
The details of advisory board or other

governing entities and their frequency of

meetings to be mentioned.

Industry analysis and

trends
Seasonality
Technological Change
Regulation/ Certification
Supply and Distribution Channels
Financial Characteristics
Preparing the Industry Analysis for your

Business Plan

Target market
Defining the Target Market- Definable,

Meaningful, Sizable and reachable

Demographic Description
Geographic Description
Lifestyle/Business-style Description
Psychographic Description
Purchasing pattern Description
Buying Sensitivities Description
Market Size and Trends

Competition
Competitive Position
Evaluating the competition
Customers Perception Product/Service

features, Indirect/Peripheral costs, Quality,

Durability/Maintenance, Image/Style/Perceived
Value, Customer Relationships and Social
Consciousness
First Mover Advantage
Market Share Distribution
Future Competition

Strategic Position
For young companies whose resources are

limited , a clear strategic position assists in

figuring out how to allocate those
resources.
A clear strategic position helps in saving a
lot of time and also makes more confident
in making business decisions.
Defining a strategic position is about
creating a meaningful place for yourself a
position in the market.

Clear Strategic Position

Differentiates you from your competitor
Enables you to capture a particular place in the

market.
Different companies may sell a similar
product ,but each may have a very different
sense.
Example- suppose three companies are making
shirts. All Times shirts defines itself as selling
formals and casuals ,Shelton shirts defines itself
in the business of selling work clothes but the
last company has never clarified its mission
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Risk Assessment
Every business involves risk
Risk assessment helps to prepare for and

prevent threats to the success.

It is not an exercise in fear and fearing the
potential investors.
It will make them feel that the scope of the
threats is understood.

Kinds of Risk
Market Risk
Competitive Risk
Technology Risk
Product Risk
Execution Risk
Capitalization Risk

Balancing Risks and Opportunities

Development Stage and

Milestones achieved to Date
Explain how far the company is in its

development and the progress made to build

the company.
Start-up companies can give the details of
technology already developed, seed fund
raised, indications of interest from key
customers and strategic partnerships made.

Financial Status
Sources of funding
Major financial obligations
Loans or Investments received
Need for funding if any.