WHAT IS A BUSINESS PLAN

FOR?

DANAO TECHNOLOGICAL COLLEGE

● Entrepreneur who plan to enter a business
endeavor must have a business plan on hand
to guide them throughout the process. Turning
Ideas into action.
● Different business plans are prepared for
different purposes. There are business plans
written prior to setting up an enterprise, which
are similar to a PREFEASIBILITY STUDY
AND a FEASIBILITY STUDY.
 PRE FEASIBILITY FEASIBILITY
STUDY STUDY

Study in an assessment of the practicality

Is rough screening aiming at identifying the
of a proposed plan or project & to
most promising ideas’ and discard the
determine whether the project is likely to
unattractive options.
succeed.
Many new enterprises need to convince
prospective business investors about the
soundness and potential of their business .
They need to convey the capabilities and
competencies of their owners and managers
The Business Plan
● It is a guide of the entrepreneur on which strategies would be most beneficial for
the enterprise to take. And there are business plans that are focused on bringing
the enterprises to a higher level of growth , a period where the enterprise has
already reached its peak and would want to enter into another endeavor by re-
creating and re-establish

● Clearly , a business plan serves many masters, 1 ST it serves the entrepreneur who
must set a navigational course. 2nd, It serves investors and cautious financiers.
And 3rd , it serves the managers and staff of the organization so that they will know
the strategies and programs of the enterprise
I. Introduction
a. The Business Concept and the Business Model
b. The Business Goals: Vision, Mission , Objectives , and Performance Targets.
c. The Business Offering and Justification
II. Executive Summary
III. The Business Proponents : Organizers with their Capabilities and Contributions
IV. The Target Customers and Main Value Proposition to the Customer
V. The Market, Market Justification based on the Industry Dynamics and the Macro Environmental
Factors Affecting the Opportunities and threats in the Market, The Size, Potential and Realistic
Share of the Market.
VI. The Product and Service Offerings
VII. The Enterprise Strategy and Enterprise Delivery Systems: Business Competitiveness
VIII. The Financial Forecasts and Expected Returns, Risks, and Contingencies
IX. Environmental and Regulatory Compliance
X. The Capital Structure and Financial Offering: Returns and Benefits to Investors, Financiers ,
and Business Partners
CONTENTS OF THE BUSINESS PLAN
THE BUSINESS CONCEPT ABD THE BUSINESS MODEL

A Business Concept contains the essence of the enterprise in a

concise but powerful manner. It stresses the value of the product
offering to the target customers who would likely to buy it.

The product concept must the be translated into a business model. A

business model is a formula how on the enterprise exactly plans to
make money out of the business
Four areas in moneymaking which the business
model must address:
1. How will the business raise revenues? What critical factors will cause the
revenues to materialize?
2. What will be the costs of the enterprise products and other costs of doing
business? How will these cost be managed to ensure comfortable profits?
What critical factors will drive the costs? How can these factors be
controlled?
3. What will be the major investments of the enterprise? Why will these
investments give the enterprise a competitive edge?
4. How will the enterprise finance the investment ? How will the enterprise
fund its growth?
The Business Goals: Vision, Mission , Objectives , and Performance Targets.

• Vision – Big picture of what you want to

achieve.
• Mission – General statement of how you will
achieve the vision
• Objectives - provide specific milestones
with a specific timeline for achieving a goal.
The Executive Summary
The executive summary contains everything that is
relevant and important to the business audience. It is
a synesthesia of the entire plan. It must contain the
major argumentations of the business proponent on
why the business will work and succeed. It should
Provide the business plan audience all the
arguments on why they should participate in
business venture.
The ES should then introduced and highlight the
Good qualities of ;

1. The business proponents and their partners;

2. The Enterprise organization and its capabilities ;
3. The technology providers and their expertise and experiences ; and
4. The suppliers and all the major service providers.

It Should likewise describe the products/services of the enterprise, their

features and attributes, and why they are the right ones to deliver to the
customers.
The Executive Summary should then proceed to discuss and justify the
Enterprise strategy and Enterprise Delivery System. The enterprise Strategy
builds and develops the game plan for attaining competitiveness. The
Enterprise Delivery System in the entire process of Converting input
(resources) into output and these output into outcomes.

It should then render all the major institutional , market, operations, and
organizational strategies previously cited into financial strategies and
forecast.

Investment requirements should be presented along with the summaries of

the projected income statements, balances sheets, cash flow, and funds flow,
and their analyses and conclusions . Yields and returns, along with risks and
contingency measures, should round up this section.
● The Executive Summary should also contain a section on the environmental
and regulatory compliance of the proposed business, as well as the more
proactive programs to become amore responsible corporate citizen

● Finally, The executive summary should represent the capital structure of the
proposed business and show how this structure will respond to the
investment programs and financial forecasts of the enterprise

● However, the executive Summary can only be written last in order to capture
the findings and insights of the other parts, but for the presentation
purposes, it is placed in the first part of the business plan.
The Business Proponent
The third section of the business plan contains
information about the business proponents or stake
holder. There are 4 types of stakeholders:
1. Resource mobilizer and financial backers
2. Technology providers and applicators
3. Governance and top management
4. Operating and support team
1. If the business plan readers are the resource providers, then
they will want to know who else are on board to share the
burden of raising money to see the whole thing through.
2. If the business plan readers are the technology providers ,
they will want to know if there will be sufficient funds to pay
for the technology
3. If the business plan readers are the governance and top
management team, then they will want to know what
strategies and performance indicators are being proposed.
4. If the business plan readers are the implementing,
operating and support teams, they will want to know what
programs, activities task and resources would be in place.
The Target Customers and the Main Value
Proposition

● The Business proponent must be very precise about the

target audience or target customers. The target customers
must be of sufficient size, sufficient paying capacity, have the
sufficient interest to purchase the products being offered by
the enterprise. The Unique Value Proposition is the
unique selling proposition of the enterprise.
Market Demand and Supply, industry Dynamics,
and Macro Environmental Factors
● The Business Plan should estimate the total market supply and demand for
the product offerings of the enterprise. The business plan should then
determine the major critical factors that influence this market demand and
supply.

● Once this critical factors and variables determined, the business plan should
then forecast the future demand and supply. If theses physical factors are
expected to remain the same, then most likely , the future forecast will follow
the past trends, If not the future estimate demand and supply should be
revised according to the new variables influencing the demand and supply.
The business plan should discuss the relevant industry dynamics:

1. Who are the competing enterprise and what are their

comparative advantages and disadvantages? What
business models and strategies are they employing?
2. Who are the suppliers in the industry and what are their
capabilities and bargaining power?
3. What are the channels of distribution being used by the
industry? How effective are these channels?
The Business plan should discuss the major trends and changing patterns in the macro-
environment, which would have significant impacts on the relevant industry and the
behavior of consumers

1. Social Environment includes the demographics and cultural dimensions that govern
the relevant entrepreneurial behavior . The structure , social status, and the dynamics
of the population at large, as well as the people’s beliefs, tastes, mores, customs, and
tradition dictate the major parameters of market behavior.
2. Political Environment the governance system of the country, or the local area of
business . It includes all the laws, rules, and regulations on allowable and disallowable
business practices.
3. Economic Environment is mainly driven by supply and demand forces. It is the
same factor that drives the interest and foreign exchange rates to fluctuate with the
movement of the market forces.
4. Ecological Environment includes all natural resources and the ecosystem that
defines the habitat of man, animals, plants and minerals.
5. Technological environment makes or breaks competing participants in any industry.
Product/ Service Offering

● Must be described by highlighting the features and

attributes that would most appeal to the target
customers.
● The business plan should also prove that the
product/services would be accepted and carried by
the distribution channels.
Enterprise Strategy and Enterprise Delivery
System

● ES by mapping the competitive landscape and by

situating the enterprise and its competitors as to
their strategies and chosen positionings.
● EDS would enable the business to implement the
ES.
 INPUT THROUGHPUT OUTPUT MARKETING DESIRED
OUTCOMES
• Harnessing of Conversion of input Good produced or Positioning • Customer
Human , money, into output and the services delivered Product Satisfied
and physical transformation Packaging • Sales Volume
resources. process within the Place attained
• Resources factory or service People • Profits generated
mobilized shop Promotion • People
- Money Price performance
- Men
- Machines
- Materials
- Method
- Management
The business outcomes should reasonably
include:

High satisfaction levels;

High sales volume, market share, and
market reach;
High financial returns; and
High people performance, productivity, and
morale levels.
Financial Forecasts: Expected Returns, Risks,
and Contingencies
The Business plan should then calculate the expected returns from the
business.
The Important return calculations are the ff;
-Expected return on sales
-Expected return on assets or investment
-Expected return on stockholders’ equity

The Business plan should also calculate the Long term returns, using
the value of money and evaluate both the business risks and the
financial risks involved.
Environmental and Regulatory Compliance

● The Business Plan must articulate the laws,

rules, and regulations governing the business
and the industry that the enterprise is in. It
should ascertain that all the necessary permits,
licenses, and authority to use are secured.
Capital Structure and Financial Offering: Returns and
Benefits to Investors, Financiers, and Partners

● It contains the capital structure and financial offerings of the

enterprise including some discussions on who are the investors, the
financiers, and the partners of the enterprise.

● Finally, the Business Plan must appeal to its target audience. It

must highlight for them the main features of the Business plan that
they are looking for.
 CHALLENGE 1: How does your Business Plan
look like?
Prepare an initial outline on how you want your own business plan to
look like. This assumes that you already have a business endeavor that
you would want to enter into. In order to prove its business viability, the
next chapters will show how to do the step-by-step process of discerning
whether the business idea you have will be worth your while.

Feel free to add contents to your initial outline as you go about the next
chapters of this book. The rest of the book will go through the entire
process of establishing an enterprise. The insights that you will gain be
Good input in completing your business plan.