Unit 2: The Business Plan

Lesson 2
The Business Plan Contents (I): Introduction, Executive Summary, and Proponents

Business Plan Introduction

The business plan introduction serves as the “birds-eye view” of your plan.
It is written at a high level while not going into details.

The Business Concept

A business concept should have the essence of the business in a short but powerful manner.

The Business Model

A business model is a formula on how the business plans to make money out of business.

Four Areas of Business Modelling

1.Raising revenue
2.The cost of the enterprise products and other costs of doing business
3.Major investments of the enterprise
4.Financing the investment

The Business Goals

The business goals show the long-term and future prospects of the enterprise.
It is composed of the vision, mission, objectives, key results area, and performance indicators.
Goals tell you wherever you want to go; objectives tell you precisely the way to get there.
Goals are usually represented in words; objectives usually go together with numbers and specific dates.

The Executive Summary

The executive summary summarizes the necessary details of the business plan for its readers.
It is timesaving for readers, for they are able to get the gist of the business plan.

Contents of the Executive Summary

For start-up business

-The business opportunity

-Taking advantage of the opportunity
-The target market
-Business model

In writing your executive summary, you already need to capture the audience's attention immediately so that they are
motivated to read the remainder of the document.

You need to end your business plan’s executive summary with a strong and clinching closing sentence that will justify
why your proposed business is a winning one.

On Writing an Executive Summary

1.Focus on providing a summary.
2.Keep your language sturdy and positive.
3.Keep it short.
4.Polish your executive summary.
5.Put yourself in your readers’ place.

Who are considered to be the business proponents in a certain business?

Types of Stakeholders
Resource Mobilizers
Technology Providers and Applicator
Government and Top Management
Operations and Support Team

Vision StatementTo establish a commanding presence and market leadership as a food chain servicing major bus terminals
in Metro Manila within the next five years.
Mission Statement To provide quality food and passenger convenience services that would help improve the growth of the
company and the lives of its employees.

A business plan introduction serves as the “birds-eye view” of your plan.

A business concept emphasizes the value of the product to be offered to the target customers who would most likely buy
it.

A business model is a formula on how the business plans to make money out of business.

The business goals show the long-term and prospects of the enterprise.

The executive summary provides the key points of a document for its readers, saving them time and getting them ready for
the entire content.

The business proponents contain information about the sakeholders of your business.

Unit 2: The Business Plan

Lesson 3
The Business Plan Contents (II): Target Customers, Value Proposition, Market, and Product Offering
Target Customers
The target market refers to a selected and well-defined client segment among the businesses’ serviceable market.
How to define your market?
Segment the market:
Segment the serviceable market consistent with their demographics, geography, psychographics, and behavioural patterns.

Identify the Unique Selling Proposition (USP):

The USP is what differentiates you from other competitors. It's why shoppers like your product over others.
Analyze the customer base:
If you’re already in business, the most effective way to outline your target market is to gather your client information and
to analyze it.

Analyze the competitors’ customer base: Who does your competitor aim to target through their promotional efforts?
Where do they sell their products? You can either choose the same target market or opt for a rather completely different
phase.

Value Proposition
A value proposition refers to the worth an organization guarantees to deliver to customers should they prefer to obtain
their product.
Create a robust differentiation between you and your competitors.
Increase the standard of prospective leads.
Gain market share in your targeted segments.
Improve your operation potency.
Increase your revenue.
Ensure that everybody in your company communicates a similar message.
A successful value proposition should be communicated to customers directly, either via the company's internet site or
alternative promotion or advertising.

Product and/or Services Offering

This section must showcase the standard, value, and advantages your business offers.
-A short explanation of the products or services you are offering.
- the proposed price of the products or services.
-Differentiation between your products or services to be offered and your competitors’ offering.
- Information about your marketing styles and strategies
the process on how your customers will process or fulfil their orders
-Any legal issues that you need to address like intellectual property and/or trademarks
-Any products or services you plan to offer in the future.

The target market refers to a selected and well-defined client segment among the business’s serviceable market.

A value proposition refers to the worth an organization guarantees to deliver to customers should they prefer to obtain
their product.

Unit 2: The Business Plan

Lesson 4
The Business Plan Contents (III): Enterprise Strategy, Financial Forecasting, Compliance, and Capital Structure

Enterprise strategy is a set of choices and actions geared toward gaining a sustainable competitive advantage.

Process of Enterprise Delivery System

1.INPUT
2.THROUGHPUT
3.OUTPUT
4.MARKETING
5.OUTCOME

Process of Enterprise Delivery System

The output will be delivered to the customers through the marketing unit of the enterprise delivery system. The marketing
would include the right packaging, pricing, promotion, selling and distribution, and the location where the target customers
can best be found.

The business outcomes should reasonably include:

high customer satisfaction levels;
high sales volume, market share, and market reach;
high financial returns; and
high people’s performance, productivity, and morale levels.

Financial Forecast
It refers to the capital investment and sources of funding in the operation of the business. This section will show the
financial projections over a period of one year and five-year program and shall determine the rate of return of investment.

Balance Sheet
The balance sheet shows the financial position of the enterprise as of the given period of time. It reflects the total assets,
liabilities, shareholders, and earnings preserved to fund future operations or to serve as funding for expansion.

You can use the balance sheet to work out a way to meet your financial obligations and discover the most effective way to
use credit to finance your operations.

Income Statement
The income statement shows the revenues, cost of goods sold, operating expenses, other income and expenses, financing
costs, income taxes, and bottom-line figures.

Cash Flow Statement

It is a projection of money receipts and expense payments. It shows how and when money flows through the business. It
provides verification of whether a company has enough liquidity or money to pay its expenses.
A cash flow statement may be a valuable measure of strength, profit, and the long-run future outlook for a company.

Environmental and Regulatory Compliance

The business plan should articulate the laws and regulations governing the business, and also on how the enterprise
operates. It should lay out the plans for acquiring the required permits, licenses, and authority to use proprietary
intellectual capital.
1. Bureau of Internal Revenue - Tax Identification Number (TIN)
2. Barangay Clearance
3. Department of Trade and Industry - Business Name Registration Certificate
4. Mayor’s Permit/ Business Permit
5. Sanitation Permit and Fire Clearance
6. Securities and Exchange Commission (SEC) Certificate

Capital Structure
The capital structure refers to the combination of debt and equity to use as the company's fund and finance its operations.

Equity Capital
This form of capital refers to any money put up and owned by the shareholders.

Capital Structure
Types:
Contributed capital - It is the money that was originally invested in the business for shares of stock or ownership in return.
Retained capital - These are profits from previous years that have been secured by the business and used for fund growth,
acquisitions, or expansion.
Long-term bonds - It is generally considered one of the safest types because the business will have several years to pay the
principal while paying the interest only in a short period of time until the loan matures.
Vendor financing - It happens once a company sells a product before having to pay their vendor. This could dramatically
increase the company's return on equity while not costing the business any upfront.
Policyholder float financing - In the case of insurance firms, this often refers to cash that does not belong to the business;
however, it earns an investment until an insurance claim has been made.

Enterprise strategy is a set of choices and actions geared towards gaining a sustainable competitive advantage.

The financial forecast section of a business plan refers to the capital investment and sources of funding in the operation of
the business.

The business plan should articulate the laws and regulations governing the business and its operation through
environmental and regulatory compliance.

The capital structure refers to the combination of debt and equity to use as the company's fund and finance its operations.