The Road Map To Your Success: Dr. D. Ashok Vit Business School

The Elements of A
Business Plan
The Road Map To Your Success
Presented by
Dr. D. ASHOK
VIT BUSINESS SCHOOL
1
Why Do I Need A Business Plan?
 A business plan enables you to
clearly evaluate whether your
business can be successful.
 It forces you to carefully plan your
growth, financing, cost of sales and
potential market share.
 It can help you attract investors,
enable financers such as banks,
venture capitalists and other
funding agents like factors,
evaluate your potential for success
and loan worthiness. 2
The Elements of a Business Plan
I. The Executive Summary

a. Mission Statement
b. General Description of the
business and its purpose
c. Location
d. Ownership
e. Likelihood of business
profitability
3
The Road to Success
Basic Idea of your business
 Mission, Vision, Outlook …
 Business development
 Business plan
 Financing
 Family and friends, Angel,
Private placement
 ?? Public offering
http://www.bplans.com/
http://www.sb.gov.bc.ca/smallbus/workshop/sample.html 4
Basic components of your executive summary are:
 How unique your business and product / service.

 How you are planning to organize your business.
 Who are all the people associate with your business.
 How much money require to formulate your business. (Budget)
 What ‘source of finance’ you are planning to use.
 How much money possibly to earn ( profitability)
 What technology you are opting to use, where it is available and what
 training required.
 Prepare a prototype model of your product/service
 Review the other Closer substitutes available in nearer market.
 Explain about your product and its features.
 Who is your target group (s) and where they are available.
 How to reach them and who are all your nearest competitor.
 How much demand you are expecting and how long.
 What asserts require to purchase, lease out etc., & Source of
 availability.
 What are all the Governmental Regulation needed to follow.
 What patent rights applicable to their business.
 What level of quantified risk and uncertainty applicable to that.
5
II. Business Description Includes:
a. Name and Location of Business
b. Principal Owners
c. Legal Structure
d. Status and Type
1. New start up, expansion, acquisition?
2. Retail, wholesale, manufacturing, service?
e. Definition of Products & Services
1. Narrative
2. Illustrations
3. Competitive Comparison
f. Major strengths and “challenges”
g. Strategic goals and objectives
6
III. Operations Plan

A. Location
1. Does the location have an impact on
the business’ ability to reach customers?
2. What are the physical characteristics

of the current or proposed location?
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III. Operations Plan (Conti..)

B. Physical Facility
Discuss the existing facilities & required changes
1. Vehicle access for clients & vendors
2. Inventory storage
3. Equipment, furniture & fixtures
4. Utilities and access to same
5. Merchandise display
6. Customer seating and/or service facilities
7. Product preparation space
8. Compliance with current environmental regulations
9. Capability for expansion
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III. Operations Plan (Conti…)

C. Supply
What are your sources of supply?
Do you depend on a single supplier?
Discuss supply alternatives, pricing or other
factors that could affect your ability to provide
your product or service to customers.
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III. Operations Plan

D. Labor
What skills and experience are

required to operate this business,
and, how are you qualified?
10
IV. Market Analysis

A. Industry Trends
1. Projections or trends for your industry or
business field
2. At what stage of the product/service cycle
will your business be entering the market?
(Introduction, growth, maturity, saturation or
decline)
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IV. Market Analysis (Conti..)
B. Description of Total Market
In order to generate a consistent & increasing
sales flow, the entrepreneur must become
knowledgeable about the consumers, businesses
or government entities that might buy his product
or service. One way to define the total market is
to use information from the internet, census,
Chamber of Commerce, public libraries, trade
associations, etc.
1. What is the size of the entire market?
2. What is your market’s growth potential?
3. Discuss the economic, social, demographic
characteristics of the market and the impact on your
business?
12

The target market is that which is comprised of
likely customers. A clear understanding of the
demographics and psychographics of your “best
customer” should help you define your strategy
for success.
1. What is the size of your target market?
2. What percentage of the target market do you
anticipate attracting as customers?
3. What is the profile of your best customer?
4. How will you attract and keep customers?
5. How can you expand your market?
13
IV. Documentation of Demand For Your

Product or Service
Provide proof from a 3rd party for credibility.
1. Signed contracts, letters of
interest/commitment
2. Market research (data you have found thru
research or purchased from a professional
market research firm)
3. Industry Statistics
4. Previous sales history from your existing
operation
14
IV. Market Analysis

E. Analysis of Competition
1. Identify your primary and secondary
competitors
2. How do they compare to your business?
(Sales volume, # of employees, locations,
customers)
3. 3. Is your competitor’s business steady,
increasing, or decreasing?
4. What are your competitors’ strengths and
weaknesses?
5. What have you learned from observing them?
15

F. Product/Service Differentiation
1. What unique niche of the market will this
business fill? Has anyone attempted to fill this
niche? Why not? Is there a patent, trademark,
copyright or trade secret that will give you a head
start on the competition?
2. Where do you believe you have a business
advantage? (Higher quality product, lower price,
superior service, quicker delivery, more
convenient locations, other?)
16
V. Sales Strategy
A. Pricing Policy
1. What is the relationship between the price
you will charge and the image you are trying
to create?
2. How will you price?(Competition, mark- ups,
discounts, labor/materials + profit)
B. Distribution
1. Describe the channel of distribution you will
use to reach your target market.
2. How does the competition get its products
to the market?
17
V. Sales Strategy
C. Promotional Efforts
1. Advertising
2. Personal Selling
3. Publicity
4. Sales Promotions
18
VI. Management Profile

A. Personal History of Key Participants
1. Business Background
2. Management Experience
3. Education
4. Industry Experience
5. Relate past experience to future success
potential
B. Duties/Responsibilities of Key Participants
C. Compensation
D. Available Resources
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VII. Financial Analysis & The Ten Year Pro

Forma
A. Project costs
B. Source and Use of Funds
C. Capital Equipment List
D. Pro Forma Profit and Loss Statement
E. Pro Forma Cash Flow Statement
F. Pro Forma Balance Sheet
G. Budget Assumptions
H. Personal Financial Statement
I. Personal Income Tax Returns
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VIII. The Feasibility Study

 Adds credibility
 Shows your willingness to use
experts
 May often uncover facts about
your industry that you may not
know, allowing you to plan for
future endeavors.
21

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The Elements of A

I. The Executive Summary

 How unique your business and product / service.

III. Operations Plan

2. What are the physical characteristics

III. Operations Plan (Conti..)

III. Operations Plan (Conti…)

III. Operations Plan

What skills and experience are

IV. Market Analysis

IV. Market Analysis (Conti..)

IV. Documentation of Demand For Your

IV. Market Analysis

IV. Market Analysis (Conti..)

VI. Management Profile

VII. Financial Analysis & The Ten Year Pro

VIII. The Feasibility Study

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