Ed - 5

ENTREPRENEURSHIP DEVELOPMENT - 5th Sem, B.
Com
Unit – 5
BUSINESS PLAN AND PROJECT FORMULATION
Highlights
Meaning of business plan
Need and preparation of business plan
Elements or aspects of business plan
Common pitfalls to be avoided in preparing business plan
Meaning of project report
Significance of project report
Contents of project report
Preparation of project report
Guidelines for project formulation
General format of a project report
Asst.Prof.Vijay Dev Mclaren

VVFGC, Tumkur. Page 1
ENTREPRENEURSHIP DEVELOPMENT - 5th Sem, B.Com
INTRODUCTION
A business plan is a written statement of what an entrepreneur hopes to achieve

in his business and how he is going to achieve it. It is a course of action that is
charted in order to reach the he is going business goal determined. One of the
important reasons for preparing a business plan is the realization it brings about
the amount of financing that maybe needed financial institutions would certainly
want to see how investment worthy the business is, by taking a look at the
business plan. Having a plan also enables the entrepreneur to look ahead and
prepare for future development. In accordance with these planned developments
the entrepreneur would need to start activating the enterprise in the direction
that would lead to realization of future plans.
A simple business plan should be clearly set out under the following headings:

1. Owner details
2. Description of the business
3. Outline of the market
4. Evaluation of competition
5. How the business will be organized
6. Proposed marketing mix
7. Premises and equipment
8. Sources of capital
9. Cash flow forecast
10. Future plans
Meaning of Business Plan – 2 marks
A Business Plan is a written document prepared by the entrepreneur that

describes all the relevant external and internal elements involved in starting a
new venture. It is often an integration of functional plans such as marketing,
finance, manufacturing and human resources.
A business plan is valuable to the entrepreneur, potential investors or even new

personnel who are trying t familiarize themselves with the venture, its goals and
objectives. The business plan serves as a roadmap to reach the destination
determined by the entrepreneur,
There are certain Guidelines in relation to preparing a business plan. They are as
follows:
1. Do understand that the planning process is critical to running a successful

business.
2. Do utilize the business plan outline to determine what to include in your
plan.
3. Ensure the plan fits you.
4. Be clear in your objectives.

5. Do include market research.

6. Do include a financial plan and projections.
7. Do explain how the plan relates to the financial projections.
8. Explain Both Strengths and weaknesses of the business idea. Do revise and
modify your plan as circumstances change.
FORMAT OF A TYPICAL BUSINESS PLAN
There is no standard outline for all business plans. It depends on the aim of the
entrepreneur, the target audience, the intended industry and so on.
A general format of a business plan is given below:
1. The Executive Summary: It is the starting point of the business plan. It gives
brief and quick information of who you are and what the business is all
about.
2. Description of the business: Name of the business, its location, its goals
and the strategies adopted.
3. Product/service: Describes the nature of product/service offered, the
target market being served and the customer demand situation.
4. Management: Form and type of organization and its culture.
5. Financial requirements: Purpose of financing and financial history of the
business.
6. Organization description: Responsibility and authority, organization chart
describing the level and status of each executive, legal structure.)
7. Industry: Industry size, market share analysis, principal markets, factors
affecting industry customer tastes and preferences, nature of competition,
competitor's strengths weaknesses.
8. Marketing strategy: Pricing policy, promotion policy, field support,
technology adopted intellectual property rights.

9. Product/Operations plan: Physical facilities, key suppliers, labour

/employee situation manufacturing processes.
10. Expected sales and expense figures for at least the first three years
Determination of the expected sales and expense figures for each of the
first twelve mo and each subsequent year is based on the market
information. Each item of expense should clearly identified.
11. Cash flow figures for the first three years
12. Estimates of cash flow consider the ability of the new venture to meet
expenses at designated time of the year. The forecasted cash flow should
identify cash at the beginning expected accounts receivable and other
receipts and all payments on a monthly basis for the en year.
13. Ownership: Names, addresses of owners.
14. Key personnel: Duties, responsibilities, job descriptions.
15. Accounting records: Accounting methods, record keeping systems.
16. Financial information: Balance sheet, income statement, cash flow,
projections, sources a uses of funds.
17. Appendices: Catalogs, sales brochures, public relations material, customer
lists, transacting banks, terms of loan, market research data, reference
letters etc.
ELEMENTS OR ASPECTS OF BUSINESS PLAN – 15 marks
1. FINANCIAL ASPECTS OF A BUSINESS PLAN
1. Before preparing the business plan, the entrepreneur must have a

complete evaluation of profitability of the venture. The assessment will
primarily tell potential investors if the business be profitable, how much
money will be needed to launch the business and meet short term finance
needs and how this money will be obtained (E.g.: stock or debt).
2. There are traditionally three areas of financial information that will be
needed to ascertain feasibility of the new venture:

3. Current balance sheet figures and proforma balance sheets for the first
three years Current balance sheet figures reflect the financial conditions of
the business at any particular time. They identify the assets of the business,
the liabilities (what is owed) and the investment made by the owner or
other partners.
4. Different Financial Projection Techniques available to an Entrepreneur
5. The different financial projection techniques are the planning tools
designed to provide the entrepreneur with a clear picture of where funds
come from, how they are disbursed, the amount of cash available and the
general financial well being of the new venture.
1. Proforma income statement
It provides a sales estimate in the first year (monthly basis) and projects operating
expenses each month. These estimates will be determined from the appropriate
budgets that would be based on marketing plan projections and objectives.
2. Proforma of cash flow
Cash flow is not the same as profit. It reflects the difference between cash
actually received and cash disbursements. Some cash disbursements are not
operating expenses (e.g. repayment of principal on loan) likewise; some operating
expenses are not a cash disbursement (e.g. depreciation). Many new ventures
have failed because of a lack of cash, even when the venture is profitable.
3. Proforma of balance sheet
It reflects the condition of the business at the end of a particular period. It

summarizes the assets, liabilities and net worth of the firm.

a) Assets: These represent everything of value that is owned by business. The

assets are categorized as current and fixed. Current assets includes cash and
anything else that is expected to be converted into cash or consumed in the
operation of business during a period of one year or less. Fixed assets are those
that are tangible and will be used over a long period of time.
b) Liabilities: These accounts represent everything owed to creditors. Some of

these amounts maybe due within a year (current liabilities) and others may be
long term debts, such as loan taken to purchase equipment and support cash
flow.
c) Owner Equity: Owner Equity represents the amount owners have invested and
retained from the venture operations. It represents the net worth of the business.
Any profit from the business will also be included in the net worth as retained
earnings. Thus, all revenues increase assets and owner equity; and all expenses
decrease owner equity and either increase liabilities or decrease assets.
Breakeven point: This is a no profit no loss zone. The break even point can be
determined from the projected income. At this point the total revenue equals
total cost. This provides insight into the financial potential for a start-up business.
e) Proforma Sources and applications of funds: This summarizes all the projected
sources of funds available to the venture and how these funds will be disbursed.
The major uses of applications of funds are to increase assets, reduce long term
liabilities, reduce owner o stockholders equity and pay dividends. The sources and
applications of funds statement emphasize the interrelationship of these items to
working capital.
2. MARKETING ASPECTS OF A BUSINESS PLAN

An entrepreneur needs information on the market potential for the

product/service. The size of the market first needs to be ascertained. To do this, it
is necessary to first define the market. For example, who are the purchasers of
the product- men/women? What is the income level- high) low? Are the dwellers
rural/urban? Are they literate/illiterate?
The following are the important marketing aspects of a business plan:
1. Well defined market: A market that is well-defined will make it easier to target
it to the right) people, project market size and determine subsequent market
goals for the new venture.
2. Channel strategy: It is also necessary to take into account the channel strategy
i.e. how the) product/service will reach the consumers. There are different
channels available. The choice) of the channel will depend on the nature of
product/service to be sold and the industry in which it is operating
3. Positioning statement: Here the needs are to be prepared. This will put forth
the attributes) benefits of the product/service and create a favorable image in the
minds of customers. E will also describe, in what way the product has been
designed and tailored to meet the needs) of the target customer. to
4. Pricing strategy: Here the needs are to be explained i.e. on what basis is the
price determined) and why it will be effective with target customers. Also, the
discounts offered at each level of the channel need to be considered.
5. Communication strategy: Communicates the benefit of using the

product/service to the consumer via media advertising, outdoor advertising,
public relations, e-commerce and the like. Brand name, logo, tagline, colour
scheme, packaging etc. will all go in creating a brand)
6. Sales strategy: Last but not the least, the sales strategy will describe the
manner in which the product/service will be sold i.e. through sales force,

telemarketing, direct mail etc. The procedure of generating leads, recruiting,

training and compensating the sales force also need to be established.
Characteristics of an Effective Marketing Plan
The marketing plan should be designed to meet certain criteria. Some important
characteristics that must be incorporated in an effective marketing plan which are
as follows:
1. It should provide a strategy for accomplishing the company mission or goal.

1. It should be based on facts and valid assumptions.
2. It must provide for the use of existing resources. Allocation of all
equipment, financial resources and human resources must be described.
3. An appropriate organization must be described to implement the
marketing plan.
4. It should provide for continuity so that each annual marketing plan can
build on it, successfully meeting long term goals and objectives.
5. It should be simple and short. However, the plan should not be so short
that details on how to accomplish a goal are excluded.
6. The success of the plan may depend on its flexibility, changes, if necessary,
should be incorporated by including "what if" scenarios and appropriate
responding strategies.
7. It should specify performance criteria that will be monitored and
controlled. If not attained, then new strategy or performance standards
may be established.
3. HRM ASPECTS OF A BUSINESS PLAN
HRM is the science and art of managing people. It is also known as Personnel
Management. An efficient and competent team of people is a prerequisite to the
success of any organization. The talents and experience that the team brings to

the business is very valuable. A description of the organizational structure along

with organizational chart is needed.
The following are the important HRM aspects of a business plan:
1. Top level management: The structure of the top level management

should be listed down. It is the apex body which makes policies, sets
goals, pools the resources etc.
2. Middle level management: It is responsible for putting the plans into
action.
3. Operational level management: This has people who are working at the
operational level, be it the shop floor in case of manufacturing, on the
field in case of sales and service personnel and in different branches in
case of service providers. These are the people who interact with the
customers and vendors directly.
4. Advisors: Advisory services in case of matters such as legal, quality,
finance and auditing are required. These services are needed because an
entrepreneur requires expert opinion from time to time.
5. Supporting staff: The supporting staff plays an important role in the
organization. Hence its duties need to be clearly laid down.
The following information about human resources in the business plan will add
clarity:
A. Number and type of employees.

B. Pay structure.
C. Training methods.
D. Job descriptions.

4. TECHNICAL ASPECTS OF A BUSINESS PLAN
When outlining the plan of technology, it should be borne in mind how the
company might grow or change. Also the technology chosen should be simple and
flexible. Technology is used in various areas such as:
A. Accounting, taxes, finance

B. Order taking and tracking
C. Inventory management
D. Database management
E. Presentations
F. Human resource management
G. Internet marketing etc
The following factors should be taken into consideration in a business plan

while choosing technology:
a) Functions
b) Ease of use
c) Security
d) Flexibility
e) Maintainability
f) Financial consideration
SOCIAL ASPECTS OF A BUSINESS PLAN
A business has certain social responsibilities in addition to the objective of

maximizing profits. The following are the social aspects of a business plan:
1. Take the welfare of society into consideration.

2. Focus on societal values.

3. Optimize the use of resources.
4. Protect the environment, ecology by undertaking anti-pollution measures.
5. Participate in social welfare programs, make charitable contributions,
undertake social forestry and adopt villages for their all round development
and the like.
6. Share the gains arising out of improved production technique with all the
stakeholders of business.
7. Assist in the establishment of an egalitarian (democratic) social order.
COMMON PITFALLS TO BE AVOIDED IN PREPARATION OF A BUSINESS

PLAN
1. Goals set by the entrepreneur are not measurable and reasonable.
2. The entrepreneur has not made a proper SWOT analysis.
3. Understanding of market is difficult.
4. Underestimation of cost and over estimation of demand.
5. No proper alternation to project planning and implementation strategies.
6. The entrepreneur has no expenses in the planned business.
7. Selection of improper business location.
8. Defective pricing strategies.
9. Selection of proper technology and machinery. 10. Ignoring locational
aspects of business.
a) Capacity-Utilization Estimates: Gross Unrealism
b) Capacity Computation: A Miscalculation

PROJECT- 2 marks
According to the project management institute, USA "a project is a time limited,
goal directed, major undertaking requiring the commitment of varied skill and
resources.
Gittinger defines project "as the whole complex of activities involved in using
resources to gain benefits".
PROJECT REPORT
A project report is prepared by the entrepreneur himself or by his consultants or

associates in order to present relevant facts before the decision makers to enable
them to decide whether the project is worthwhile for the investment or not and
hence serves as a post-investment activity. The project report involves:
1. Preparation of detailed specifications, designs, drawings, plant layout, detailed

design of the process, time schedules for the execution of the project.
2. Collection of details or a complete work plan for various processes of the

project to be implemented after the proposal has been finalized by the
entrepreneur.

MEANING OF PROJECT REPORT
A project report gives a complete analysis of the inputs and outputs of the
project. It enables the entrepreneur to understand, at the initial stage, whether
the project is sound on technical, commercial, financial and economic
parameters.
SIGNIFICANCE OF PROJECT REPORT – 15 marks
1. Serves as a Master Plan
For successful management, effective planning is absolutely essential. A project

report serves as a business plan indicating the objectives or goals of the
enterprise and states in detail how these objectives are going to be achieved at
various stages of the enterprise.
2. Describes Direction / Road Map
A project report is like a road map. It describes the direction in which the
enterprise should go & how to reach the goal. Without well-defined goals and
operational methods as stated in the report, most enterprises land in troubled
waters and flounder on the rocks of hard times.
3. Shows Feasibility
A project report also shows the feasibility of the proposed project and the
probability of economic, financial, achieving profit. Whether a project is feasible
from different angles commercial, social etc. can be ascertained while preparing a
project report.

4. Foresees requirements
A project report enables an entrepreneur to realize what he needs for

implementing the project well in advance. It also gives a general idea of his
various resource requirements like raw materials, manpower, finance,
infrastructure facilities etc. and also the means of procuring them. Thus, it
enables an entrepreneur to foresee his requirements in advance and helps him to
take suitable decisions accordingly.
5. Indicates Profitability
It gives an indication of likely and benefits which a prospective entrepreneur can

get from his venture. This profitability indication will help an entrepreneur to take
an important investment decision. Thus, the financial rewards can be visualized in
advance.
6. Helps in Decision Making
Crucial decisions have to be made at various stages of production. How much to

produce to achieve Break-Even-Level? How to fix the repayment schedule? Such
important decisions can be taken with the help of a project report prepared well
in advance. It also anticipates problems in advance so that suitable decisions can
be taken then and there to solve those problems. Thus, it helps to visualize action
tasks also.
7. Financial Assistance
The preparation of a project report is absolutely essential for those enterprises

which apply for financial assistance from different financial institutions and banks.

It is on the basis of project report, that the financial institutions could be given or
not. In most cases, the quality of the firm's
project report weighs heavily in taking lending decisions. Thus, it paves the way
for financial assistance which is the life blood of an enterprise.
8. Ensures Survival
1 The survival of any business depends upon the marketability of its products. The
project report projects the demand and supply position, competitor's position in
the market, expected price etc. and thus ensures the survival of the business unit.
9. Plan Expected Performance
A project report is prepared to plan in advance about the fulfillment of expected

performance in various areas like technology, marketing, finance, personnel,
production, customer satisfaction and social endowment.
10. Assess Profitability
Project report assesses the demand potential of the proposed product, works out
the cost of capital invested and operational costs and side by side expected
profitability of the proposed project.
CONTENTS/PREPARATION OF PROJECT REPORT – 5 marks
The report normally covers the following aspects:

1. Sources of finance (long term and short term)

2. Availability of machinery .
3. Overall profitability
4. Project schedule etc
5. Technical know-how
6. Market potential
1. Technical feasibility involves factors like:
1. Product specifications to be adopted.

2. Raw materials availability as per requirement.
3. Sources of raw materials.
4. Outline of manufacturing process.
5. Quality control measures.
6. Power/water availability and supply.
7. Transportation facilities.
8. Communication network etc.
2. Economic viability involves factors like:
1. Compilation of demands for domestic and export markets

2. Appropriate installed capacity requirements in regard to capital assets
3. Evaluation of the production costs
4. Capturing a substantial share of market sale
5. Revenue expected
6. Suitable price structure etc
3. Financial implications
1. Project costs (Non-recurring expenses)

2. Building

3. Plant and machinery

4. Equipments
5. Preoperative expenses etc
6. Project costs (Recurring expenses)
7. Working capital needs
8. Raw material needs
9. Wages for personnel etc
10. Cost of production (probable) over a period of 5 years.
11. Expenses such as fixed and variable expenses
12. Break even analysis
13. Profit per month
14. Percentage of profit on total investment and on expected sale.
4. Managerial competency
1. The new entrepreneur should give proper attention to the new venture and
treat the product line chosen as a major Economic Activity.
2. He should develop a desire to adopt Modern Management Practices for
successful
3. Without blindly imitating other brands, he should market a product in his
own innovative spirit.
4. He should maintain updated records regarding
5. Actual production
6. Sales every month
7. Potential customers
8. New market segments
9. Changes in fashions / styles / designs
10. Process and know how
11. Description and different processes available.
PROJECT LIFE CYCLE
A project has to pass through three distinct stages: See to

1. Pre-investment Stage: It covers setting of aims and objectives, forecasting of

demand, SPORT R selection of best means or strategies to achieve objectives,
evaluation of characteristics of resources or inputs required, projection of
financial plan, cost-benefit analysis and ultimately, the pre-investment appraisal.
The project idea is converted into a concrete investment proposal or scheme on
which promoters and financiers can base their investment decision. PER
2. Construction Stage: It starts after the investment decision is taken. Resources

in the form of land and building, plant and machinery, transport, communication
and other services, control systems, sales and marketing organization, managerial
personnel, acquisition of materials and supplies etc., are assembled and all these
resources are allocated to develop or create a tangible project which is ready to
achieve the set objectives.
3. Normalization Stage: The allocated resources of assets (created during the

second stage) are utilized or employed to produce the end results, i.e., output of
goods or services which are required to fulfill the project objectives. The project
starts operating, i.e., processing inputs and generating outputs.
PROJECT MANAGEMENT
It is the discipline of organizing and managing resources in such a way that these
resources deliver all the work required to complete a project within the defined
scope and cost constraints.
Objectives of Project Management
1. To complete the project,

2. To complete within the budget.pl bon f

3. To complete within the allocated time.
Benefits of Project Management
1. Deliver projects successfully to clients. 1

2. Achieve goal clarity and measurement.
3. Proper co-ordination of Resources.
4. Risk identification and management.
5. Saving time and cost.
6. Enables to achieve an agreed outcome
PROJECT FORMULATION
It is defined as taking a first look carefully and critically at a project idea by an

entrepreneur and build up an objective project in its totality after carefully
weighing its components. The entrepreneur will formulate the project ideas with
the assistance of specialists/consultants. It is an analytical management aid.
Meaning of Project Formulation
Project formulation is defined as taking a first took carefully and critically at a

project idea by an entrepreneur to build up an all round benefit to project after
carefully weighing its various components.
Phases of Project Formulation
These are:
1.Conception of an idea.
2. Analysis of related aspects.

3. Formulation of a project.
Design of a project.
The process of project development in sequential stages are:
SEQUENTIAL STAGES OF PROJECT FORMULATION
1. Feasibility Analysis At this stage, the project ideas is examined from the point
of view of whether to go in for a detailed investment proposal or not. As project
ideas is examined in the context of internal and external constraints, three
alternatives could be considered. First the project ideas seems to be feasible,
second, the project idea is not a feasible one and third, unable to arrive at a
conclusion for what of adequate data. 8
2. Techno-Economic Analysis: In this step, estimation of project demand potential

and choice of optimal technology is made. Market analysis is also in-built in this
step.
3 Project Design and Network Analysis: The sequence of events of the project is
presented. A detailed work plan of the project is prepared with time allocation for
each activity and presented in a network drawing.
4.Input Analysis: This step assesses the input requirements during the
construction of the project and also during the operation of the project. Input
analysis considers the recurring as well as non-recurring resource requirements of
the project and evaluate the feasibility of the project from the point of view of the
availability of these resources.
S. Financial Analysis: This stage mainly involves estimating the project costs,
estimating its operating costs and fund requirements. Financial analysis also helps
in comparing various project proposals on a common scale, thereby aiding the
decision-maker.

6. Cost-Benefit Analysis: Cost benefit analysis will consider the project from the
national viability point of view, Here, we not only take into account the apparent
direct costs and direct benefits of the project but also the costs which all entities
connected with the project have to bear and the benefits which will be enjoyed
by all such entities.
7. Pre-investment Analysis: All the results obtained in the above steps are
consolidated and various conclusions are arrived at to present a clear picture. At
this stage, the project is presented in such a way that the project-sponsoring
body, the project-implementing body and the external consulting agencies are
able to decide whether to accept the proposal or not.
GUIDELINES FOR PROJECT FORMULATION
1. General Information
The project formulation should include an analysis of the industry to which the
project belongs. It should deal with the past performance of the industry. The
description of the type of industry should also be given, i.e., the priority of the
industry, increase in production, role of the public sector, allocation of investment
of funds, choice of technique etc. This should also contain information about the
enterprise submitting the feasibility report.
2. Preliminary Analysis of Alternatives
This should contain present data on the gap between demand and supply for the
which are to be produced, data on the capacity that would be available from the
projects that areas production or under implementation at the time the report is

prepared, a complete list of all exist plants in the industry, giving their capacity
and level of production actually attained, a list of f projects for which letters of
intents/ licenses have been issued and a list of proposed projects.
3. Project Description
The feasibility should provide a brief description of the technology /process

chosen for k project. Information relevant to determining optimality of the
location chosen should also to included. To assist in the assessment of the
environmental effects of a project, every feasibility report must present the
information on specific points, i.e., population, water, air, land, flora as fauna;
effects arising out of project's pollution, other environmental discretions etc.
4. Marketing Plan
A good marketing plan should contain the following items:
a. Data on the marketing plan.
b. Demand and prospective supply in each of the areas to be served.
c. The method and data used for main estimates of domestic supply and selection
of the market areas should be presented. Estimates of the degree of price
sensitivity should b presented.
d. It should contain an analysis of past trends in prices.
5. Capital Requirements and Costs
The estimates should be reasonably complete and properly estimated.

Information on all costs should be carefully collected and presented.
6. Operating Requirements and Costs
Operating costs are essentially those costs which are incurred after the
commencement commercial production. Information about all items of operating
cost should be collected. Business Plan and Project Formulation labor, repair and
costs relate to the cost of raw materials and intermediates, fuel, utilities,
maintenance, selling expenses and other expenses.
7. Financial Analysis
The purpose of this analysis is to present some measures to assess the project. A
proforma Balance Sheet for the project data should be presented. Depreciation
should be allowed for on the basis of specified rate by the Bureau of Public
Enterprises (BPE). Foreign exchange requirements should be cleared by the
Department of Economic Affairs (DEA). industries, The feasibility report should
take into account income-tax rebates for incentives for backward areas,
accelerated depreciation, etc. The sensitivity analysis should also be presented.
The report must analyze the sensitivity of the rate of return of change in the level
and pattern of product prices.
8. Economic Analysis
financial viability of the priority Social profitability analysis needs some

adjustment in the data relating to the costs and returns to the enterprise. One
important type of investment involves a correction in input and costs, to reflect
the true value of foreign exchange, labor and capital. The enterprise should try to
assess the impact of its operations on foreign trade. Indirect costs and benefits
should also be included in the report. If they cannot be quantified, they should be
analyzed and their importance emphasized.
GENERAL FORMAT OF A PROJECT REPORT
General Guidelines
The length of your report should reflect the complexity of the topic and the
thoroughness of the research.

The report should be self-contained (explain any terminology particular to the

topic the first time you use it), consistent and to the point. It should be
understandable to someone who has background in the area of the report but is
unfamiliar with the particular topic of the report. Use standard formal level of
English (no slang or colloquialisms).
Report Format:
The following shows the pattern that should be used for the term report:
1. Cover
2. Title page
3. Summary
4. Table of contents
5. Introduction
6. Methods (optional)
7. Discussion
8. Conclusions
9. Recommendations (optional)

10. References (optional)
11. Appendices (optional)
1. Cover
Purpose: Provides a binding for the report, identifies the topic and owner of the
report.
Content:
Title of the report
Name of student
• Date report submitted
2. Title Page
Purpose: Identifies the topic and ownership of the report.
Content:
Report title (clearly identifies the subject of the report)
• Name of the addressee or recipient, the University, faculty and department
Name of student, student ID
Date, place
3. Summary

The summary is considered by many to be the most important part of a report. It

is a difficult part to write and should always be written last. It is often the only
part that managers in the word place have time to read, so it is important to state
your case succinctly (normally less than one page).
Purpose: Provides a brief summary of the report, information abstract. No

reference is made to any part of the report; a summary is complete in itself.
Content:
States the more important information in the report .
The purpose, method, reason for the report
The findings, conclusions, decisions, recommendations All major generalizations

or assumptions of the report
4. Table of Contents
Purpose: Identifies contents and organization of document. Content:
Section headings Page numbers
Purpose: Introduces the subject of the report to the reader. Remember that the
reader may be from a different branch of the discipline and will require some
orientation to the subject of your report.
5. Introduction
Content: Subject and purpose of the report: states briefly why the report is being
written and what the report is intended to achieve.

Scope: describes how broad or how limited the treatment of the subject will be.
Plan of development: outlines which areas will be covered.
• Thesis of the report: the general conclusion and/or the general

recommendation.
7. Discussion
8. Conclusions
6. Methods
Purpose: The methods section details precisely how the study was conducted,
how the data that it should contain were collected, classified and analyzed. The
acid test of a Methods section sufficient detail to allow a competent researcher to
repeat the study. Thus, the Methods section should be comprehensive, while
avoiding irrelevant detail.
Content: Should be complete and precise detailing the preparation of solutions

and your step by-step procedure.
Purpose: Presents evidence (facts, arguments, details, data, test results, etc.)
necessary to the purpose of the report.
Content: This section contains the main part of the report. All evidence must be
developed in an organized, logical and orderly manner. All information must be
relevant. This section should contain pertinent figures, tables, footnotes, and
references to material in appendices. Any additional supporting information
should be placed in an appendix but referenced in the discussion.
Purpose: States briefly the major inferences that can be drawn from the
discussion.
Must be based on information presented in the discussion

Each conclusion should be presented as a separate paragraph sequence for easy

reference
Never suggest or recommend future action
paragraphs manner.
9. Recommendations
Purpose: Suggests a course of action based on the findings and conclusions.

Content:
Must follow logically from the conclusions
• Must be supported both by the conclusions and by the data in the discussion
References 10. References (optional)
Purpose: Acknowledge use of material from printed sources in the preparation of

your repos. Indicate exact source of all quotations and/or results of previous
work. Content:
Author's name, title of book, year published, publisher's number
Bibliographic entries are listed alphabetically by the name of the author or by the
first major work of the title. Example: Vetter, C. "Work term report Guidelines",
Co-op Journal, Vol. 1 No. 1, August 1992.
Common knowledge does not require a reference, e.g. the speed of light, the
atomic weight of some element. If a new value for a commonly accepted quantity
is cited, the source should be referenced.
11. Appendices

Purpose: Include data that is not necessary to an immediate understanding of the

discussion Content:
• Appendices can contain program listings, drawings, technical specifications, or

other detailed explanations of some aspects of your report.
Third, the entrepreneur should try to view his business from the point of view of
the investor, where sound financial projections are required.
ADVANTAGES OF A BUSINESS PLAN
1. A business plan is a valuable tool for an entrepreneur to be on track and to

move in the right direction.
2. It helps to others i.e. customers, suppliers, employees, financial institutions,
friends l understand the vision of the entrepreneur.
3. A well constructed business plan allows mistakes to be made only on paper
rather than in the market place.
4. It creates not only the confidence but also assures entrepreneurs that they
can achieve the goals set by them.
5. It serves as an important tool to obtain the required financial assistance
from the banks. It helps to secure economy in business operations.
6. It helps entrepreneurs to implement programs in a systematic manner and
get maximum benefits from the programs chalked out.
7. Business plan helps entrepreneurs to make constructive use of new
opportunities.
8. Research studies show that there is a positive relationship between
planning and business performance i.e. the firms who plan perform better
and are likely to succeed than firms that do no plan. Therefore, every
business unit should prepare a business plan to deal with uncertainties
effectively and to gain sustainable business growth.


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ENTREPRENEURSHIP DEVELOPMENT - 5th Sem, B.

Meaning of business plan

Need and preparation of business plan

Elements or aspects of business plan

Common pitfalls to be avoided in preparing business plan

Meaning of project report

Significance of project report

Contents of project report

Preparation of project report

Guidelines for project formulation

General format of a project report

Asst.Prof.Vijay Dev Mclaren

A business plan is a written statement of what an entrepreneur hopes to achieve

Asst.Prof.Vijay Dev Mclaren

Meaning of Business Plan – 2 marks

A Business Plan is a written document prepared by the entrepreneur that

A business plan is valuable to the entrepreneur, potential investors or even new

1. Do understand that the planning process is critical to running a successful

Asst.Prof.Vijay Dev Mclaren

5. Do include market research.

FORMAT OF A TYPICAL BUSINESS PLAN

A general format of a business plan is given below:

Asst.Prof.Vijay Dev Mclaren

9. Product/Operations plan: Physical facilities, key suppliers, labour

ELEMENTS OR ASPECTS OF BUSINESS PLAN – 15 marks

1. FINANCIAL ASPECTS OF A BUSINESS PLAN

1. Before preparing the business plan, the entrepreneur must have a

Asst.Prof.Vijay Dev Mclaren

1. Proforma income statement

2. Proforma of cash flow

3. Proforma of balance sheet

It reflects the condition of the business at the end of a particular period. It

Asst.Prof.Vijay Dev Mclaren

a) Assets: These represent everything of value that is owned by business. The

b) Liabilities: These accounts represent everything owed to creditors. Some of

2. MARKETING ASPECTS OF A BUSINESS PLAN

Asst.Prof.Vijay Dev Mclaren

An entrepreneur needs information on the market potential for the

The following are the important marketing aspects of a business plan:

5. Communication strategy: Communicates the benefit of using the

Asst.Prof.Vijay Dev Mclaren

telemarketing, direct mail etc. The procedure of generating leads, recruiting,

Characteristics of an Effective Marketing Plan

1. It should provide a strategy for accomplishing the company mission or goal.

3. HRM ASPECTS OF A BUSINESS PLAN

Asst.Prof.Vijay Dev Mclaren

the business is very valuable. A description of the organizational structure along

The following are the important HRM aspects of a business plan:

1. Top level management: The structure of the top level management

A. Number and type of employees.

Asst.Prof.Vijay Dev Mclaren

4. TECHNICAL ASPECTS OF A BUSINESS PLAN

A. Accounting, taxes, finance

The following factors should be taken into consideration in a business plan

SOCIAL ASPECTS OF A BUSINESS PLAN

A business has certain social responsibilities in addition to the objective of

1. Take the welfare of society into consideration.