Reviewer in entrep on the cost of sourcing and manufacturing of the
Business plan
- is a document that describes the various
external and internal elements involved in starting a
business or expanding an existing venture, amidst a
dynamic business environment.
Importance of business plan
1. It helps determine whether a proposed or existing
business venture is a viable given its target market.
2. It guides the entrepreneur in mobilizing the
resources needed by the business.
3. It serves as a tool in helping get financing for the
business.
Information needed for the major sections of the
business plan
1. Market information - these could affect, directly or
indirectly, the demand of the product or service.
2. Information about the operations - whether the
business venture will be viable also depends largely
product or of the providing service.
3. Financial information - require the entrepreneur to
include a list of all sources of revenue and a list of all
possible expenditures, direct operating expenses, and
cash required for non-expense items.
Major sections of business plan
1. introductory page - Brief summary of business
plan’s content
2. Executive summary - Prepared after the total plan
has been written. Must stimulate the interest of its
readers.
3. Environmental and industry analysis - Important
to describe the general conditions within which
entrepreneurial venture will operate
4. Description of business - Venture’s mission
statement, which could serve as guide in decision-
making.
5. Production plan - Describes the complete
manufacturing process.
6. Operations plan - Describes the flow of goods and
services from the production to the customer,including
purchasing, inventory of raw materials and of finished
goods, etc.
7. Marketing plan - Describes the target market for
the new product or service.
8. Organizational plan - After reading this section the
potential investors must be convinced that the
individuals who will run this venture collectively have
competence and expertise needed to ensure a
successful business outcome.
9. Finance plan - Determines the investment that
must be poured into the business, and indicates
whether the business is an economically viable
undertaking.
10. Assessment of risk - Discusses the risks that
might prevent the business from achieving its
objectives.
11. Timetable/Milestones - Determines when major Organizational plan
activities will happen and when milestones will reach. - Section of the business plan that identifies the
12. Appendices - Include the market research data, form of ownership the business venture will take.
detailed financial projections, full resumes of business
founders and members of the top management team.

* Chances of failure will increase if the business plan

is poorly prepared.

Marketing plan
- Is a document containing the marketing
objectives, marketing strategies, and the activities that
will be undertaken to execute this strategies.

Steps in preparing a marketing plan

1. Assessing the business situation.

2. Defining the target market.
3. Setting the marketing goals and objectives.
4. Developing marketing strategy and action
programs.
5. Preparing the budget for the action plan.

SMART
S - Specific
M - Measurable
A - Attainable
R - Realistic
T - Time-bound

Things to consider in developing a marketing

strategy and action plans
Organization structure - In this section of the
 Product
organizational plan will show the reader of the
 Price
business plan who the principal owners of the
 Promotion
business are, who constitutes the management team,
 Place (Distribution)
and who provides valuable advice to the business
owners and/ or management team.

Financial plan
- Includes the financial projections of the new
venture.

Financial projections - the entrepreneur must make

reasonable assumptions about revenues, costs, and
expenses.

Projected income statement - summarizes the profit

(or loss) the company expects to generate within the
year.

Projected balance sheet - summarized the assets,

liabilities, and net worth of the business.
Assets - everything that the business owns that can
be used to create value.
Liabilities - these represent everything that the
business owes to banks and other creditors.
A. Current liabilities - must be paid within the
year.
B. Long term liability - must be paid beyond 1
year.
Owner’s equity - Representing the excess of all
assets over all liabilities, this is also known as net
worth of the business.

Breakeven analysis - refers to volume of sales at

which the business neither makes a profit nor incurs a
loss.

Breakeven quantity (BEQ) =

Total fixed cost
Selling price (SP) - Variable cost/ unit (VC/U)
-smiley