Unit 2

BUSINESS PLAN FOR

A NEW VENTURE -
INTRODUCTION
 Defining the business plan
 -A written description of the business idea & how it will be carried out,
including all major business activities is called business plan.
 - A business plan is a document that brings together the key elements of a
business that include details about the products & services, the cost sales &
expected profits.
-According to David H. Holt “ A business plan is a comprehensive
set of guidelines for a new venture.
A written document
 -Explains the various important steps
 -To start& perform a particular task of
 A proposed business.
 -All course of action , feasibility etc are described in business plan.
• A written document that describes all the relevant external and internal elements and
strategies involved in starting a new venture.
 Scope & value of the business plan

*The business plan may be ready

1) Entrepreneur
 2)Employee
3) Investors
4) Bankers
5) Advisors
6)Customers
7) Consultants
8)Supplier
1) Entrepreneur : Who understands better that anyone else
the creativity & technology involved in the new venture.
2)Employee : Business plan is important for both managerial &
administrative employees.
It articulates the vision & mission of your firm . It guides the
employees to move ahead in a consistent & purposeful manner.
3) Investors: Business should be realistic. It should ensure
a high return to the investors with minimum risk. It also
requires a sound financial projection . It should also
ensure the validation of idea
4) Bankers: Business plan is important for bankers.Bankers
study company business plan .A company’s financial dealing
with an institution that provides business loans , credit,
saving accounts, specifically designed for companies rather
than for individuals.
5) Advisors:
6)Customers :The customer analysis section of your
financial planning business plan must detail the
customers you serve or expect to serve.
7) Consultants
• 8)Suppliers:Knowing what type of materials, what
quantity(approximate)of materials and what quality of materials
are to be supplied for the partner business.
There are 3 perspectives should be considered in preparing
the plan :
Perspectives of the entrepreneur:
 First is the perspective of the entrepreneur . the
entrepreneur must be able to clearly articulate what the
venture is all about.
Marketing perspective: Second is the Marketing
perspective. Entrepreneur must try to view their business
through eyes of their customer.
Investor’s perspective : Third the entrepreneur should try to
view his or her business through the eyes of the investor.
 Writing the Business Plan
Writing a business plan is a complex process.
It is a time consuming process.
The entrepreneur should be aware that each business plan may
be different depending on the purpose of the plan & who
will be reading it.
Sections / Contents /Elements Business Plan
1) Title page & contents : This is the first page of your
business .( information of business plan & detial o f
business.
-Name & address of business
- Nature of business
2)An executive summary :. The executive summary is a statement that
shows the picture of company profile & goals. It should include a
mission statement, a brief description of the products or services offered &
summary of future plan. It should involve the following key of elements
-Products & service the mkt venture serve
-Competitive advantage of business
-Estimated sales & profit.

 3)Description of business :Next up is your company description, the

components you should include in your company description:
 Background o business
 Products & services
 Location of business
 Business structure
 Business’s vision , mission& value proposition
 Business objectives, both short & long term
 Special feature of business etc.
 4)Perform a market analysis :No matter what type of business you start,
it’s no exaggeration to say your market can the right market for your
products .
 One with plenty of customers who understand & need your product & you
will have a head start on success
 Components involve on mkt analysis
- Size of market

- Growth rate of market

- Market trends

- Market profitability

- Distribution channels

5) Operations &Management : The operations & mgt component of plan

is designed to describe how the business function on a continuing basis .
Operations involve :
-Materials ,
- Capital
-Manpower
 Management involve: ( role , responsibilities , relationship)
 Company's organizational structure

 Details about the ownership of your company,

 Profiles of your management team,

 Qualifications of your board of directors.

6)Description of products & services: This section describes

the benefits, production process , & life cycle of your products
or services & how what your business offers is better than your
competitors .It involves:
 describe your service or product
 emphasizing the benefits to potential and current customers
 Focus on why your particular product will fill a need for your
target customers
 Details About Your Product’s Life Cycle.
7) Competitive analysis: In open market economy there is
competition in every sector of business.it determines the
following:
- Strengths & weaknesses of the competitors within company’s
mkt.
-strategies that will provide a advantage.
- Barriers that can be developed to prevent competition after
entering mkt.
8) Make a financial plan: No matter how great your idea is
regardless of the effort , time & money you invest a business lives
or dies based on its financial health . The level of detail required in
your financial plan will depend on your goals. Financial plan
include ( an income statement , a balance sheet , cash flow
statement, financial data, projected profit & loss assessment)
9)Summary : It is concluding part of business plan.In this
segment , key aspects of business are specified in brief,It
involve :
 - Capital requirement, product & service features , target
mkt , potential customers , estimated sales volume
10) References & appendix :This is the supporting segment
of business plan. At this segment , if any references are
considered for preparation of business plan , details about
references should be listed . If any evident documents
attached with business plan those should be specified in
appendix . It involve legal documents , patent & copyright ,
business register , customer contacts .
 The marketing plan

The marketing plan

Characteristic of a marketing plan
Step in preparing a marketing plan
Marketing research for new venture
Marketing plan:
- One of the most important element of the
comprehensive business plan.
- Marketing planning is an annual activity that focuses on
implementing decisions related to the marketing mix
variables (product, price, distribution and promotion).
- It is a tool that helps the entrepreneurs to :
1)Avoiding incorrect actions 2) Reducing frequency of
 -As part of the business plan, the marketing plan section
should focus on strategies for the first three years of the new
venture.
Characteristic of a marketing plan

It should provide a strategy for fulfill the company mission

or goal.

 It should be based on facts and valid assumptions.

 It must provide for the use of existing resources. Allocation

of all equipment, financial resources and human resources

must be described.
 It should provide continuity so that each annual

marketing plan can build on it, successfully meeting

longer-term goals and objectives.

 It should be simple and short

 It should specify performance criteria that will be

monitored and controlled.

Step in preparing a marketing plan:
1) Situation analysis
-Background of venture
 -Strength & weaknesses of venture
- Marketing opportunities & threats
 - Competitor & analysis
2) Marketing objectives & goals:
 -Define the objective or problem of the venture.
 -The goals should be measure properly.
- Not all the objectives & goals can be quantifiable.
- The goals & objectives should be feasible , realistic &
achievable.
3) Marketing strategy & action programs
-After establishing goals & objectives , the
entrepreneurs must develop
Strategies & actions plans to achieve them.
- Mkt mix must be used to formulate those strategies &
action programs.
 (product , price , place , promotion)
4) Budgets :The plans should be budget as per the
financial plan but sometimes flexibility is needed.
5)Controls: Generally , controlling of the plan involves
tracking specific results of the marketing effort,
Marketing research for new venture:
It involves the gathering of data in order to
determine such information as
 Who will buy the product or service?
 What is the size of the potential market?
 What price should be charged?
 What is the most appropriate distribution channel?
 What is the most effective promotion strategy to inform and
reach potential customers?
Marketing research involve the gathering of information
about a particular market , followed by analysis of that
information.
Marketing research process for new venture:
1 Defining the research purpose & objective:The first step in
marketing research is to defining the research purpose &
objectives.Define the objective or problem of the venture
 How much potential customer will be willing to pay for
the product or service?
 Where potential customers would prefer to purchase the
product or service.
 Where the customer would expect to hear about or learn
about such a product or service.
2)Gathering Data from secondary sources
 Entrepreneur should gather the data from the
secondary sources.
 Secondary sources are generally reliable & free.

 Sources of secondary data could be trade magazines,

libraries, government agencies, universities, and the
Internet
3)Gathering information from primary sources:
-Information that is new in primary data
- Gathering primary data involves a data are:
observation , networking , interviewing ,focus groups ,
experimentation , data collection & questionnaire .
4) Analyzing & Interpreting the results:

 Data collection
 Interview
 Data classification and analysis
 Result interpretation
 conclusion
 Thank You