Submitted By:

Kala Hol
Olkar Nain
Baker Olwala

Business Plan -CREATING AND STARTING THE VENTURE

 Business Plan -CREATING AND STARTING THE VENTURE

۞Business Plan: - A written document that describes a business, its objectives,

strategies, market and financial forecast.
 Prepared by the entrepreneur, that describes all the relevant external and internal
elements involved in starting a totally new business or venture.
 It’s a long time view of the business and its environment.
 The process involves:
 Personal objectives of the owner/manager.
 SWOT analysis, the strengths and weaknesses of the existing business and
the opportunities and threats that it faces.
 Every aspects of the venture needs to be described; the project, marketing,
research, and development, manufacturing, management critical risk, financing
and milestones and timetable.
 For anyone starting a business, it's a vital first step

۞Purpose of the Business Plan: - The business plan is valuable to the entrepreneur and
investors because:-
 It helps determine the viability of the venture in a designated market.
 It gives guidance in organizing planning activities.
 It serves as an important tool in obtaining financing.
 Helps management or an entrepreneur to clarify, focus and research their
businesses or project's development and prospects.
 Provides a considered and logical framework within which a business can develop
and pursue business strategies.
 Serves as a basis for discussion with third parties such as shareholders, agencies,
banks, investors etc.
 Business plan offers a development benchmark against which actual performance
can be measured and reviewed.
۞In Search of New Ideas and Products:-
Generation of workable ideas is very important to make a business plan. Before preparing
a business plan, the entrepreneurs usually look around to find clues for new ideas

Sources of ideas:-
1. Sales Force:
a. Knowledge of customer’s needs
b. Knowledge of the industry and competition
c. Inquiries from customers or prospects

2. Research and Engineering:

a. Application of basic research.
b. Accidental discoveries.
c. Original or creative thinking
d. Testing existing products and performance record.

3. Outside Sources:
a. Inventors
b. Stockholders.
c. Suppliers or vendors
d. Middlemen.
e. Ad agencies
f. Prospective consumers’ suggestion observing markets.

4. Observation of Markets:
a. Utilization of by-products or scrap
b. Income levels
c. Market surveys
d. Future demand
e. Suggestion from employees
f. Technology, etc.

5. Study of Project Profiles:

a. Various government and public agencies periodic profile.
b. Various private agencies projects and industries profiles

6. Other Agencies:
a. Consultancy organizations.
b. Investment centers
c. Export promotion councils

7. Trade Fairs and Exhibitions:

a. national and international trade fairs.
۞Project Formulation: - Project formulation is by itself an analytical management aid.
It enables the entrepreneur to arrive at the at the most effective project decision. Project
formulation exercise normally includes such aspects as follows:
 Feasibility Analysis.
 Techno-Economic Analysis Social.
 Project Design and Network Analysis.
 Financial Analysis.
 Cost-Benefit Analysis, And
 Input Analysis.

1. Feasibility analysis: - Feasibility analysis is the process of evaluating the future of a

project idea within the limitation of the project implementing body and the constraints
imposed on the project situation by the environment.
• Pre-feasibility study: Study for determining how much money& what time will be
needed from new and existing sources for doing the feasibility study.

 Feasibility study: A Feasibility Study is a preliminary study undertaken before the

real work of a project starts to ascertain the likelihood of the project's success.

 It is an analysis of all possible solutions to a problem and a recommendation

on the best solution to use. It involves evaluating how the solution will fit into
the corporation.

 An examination of a particular project or business to assess its chances of

operating successfully, before committing large amounts of money to it.

2. Techno-Economic analysis: - Techno- economic analysis is primarily concerned with

the identification of the project demand potential and the selection of the optimal
technology/technique suitable for achieving the project objectives.
 Determination of project demand potential: estimation of demand potential is the
staring of techno-economic analysis. Means probable customer demand.
 Selection of optimal project strategy: Select an strategies for achieving the project
objectives

3. Project design and Network analysis: Project design is the heart of a project. It
defines the individual activities.
 Being relation with the customer, suppliers, intermediary, stockholder,
shareholder, agent, dealer, govt, bank, insurance, financial institution, etc.

4. Financial analysis: - Financial characteristics of an investment proposition have a

significant impact on the acceptability or rejection of project. The purpose of financial
analysis is to identify these characteristics and to determine the financial feasibility of a
project.
5. Feasibility report:- The details gathered from feasibility studies and presented in
various table, report and statements are consolidate into one master report called project
report or feasibility report.
 5-6 page report prepared from collected feasibility study data
 Findings of feasibility study

6. Cost Benefit analysis:- The costs and benefits under the financial analysis are
estimated employing market prices based on financial objectives; this cost-benefit
analysis considers them only at certain imputed prices based on social or national
objectives.
 Cash-flows statement for project cash inflows & outflows.

7. Input analysis: - After a project idea has withstood the tests of feasibility analysis,
techno-economic analysis and network analysis, it becomes necessary to determine the
resource requirements of the project. Input analysis is primarily concerned with the
identification, qualification and evaluation of project inputs.
۞Writing the business plan

A. Introductory page: (This is the title or cover page that provides a brief summary of
the business plans.)
 Name And Address Of The Business
 Name and address of principals
 Nature of business
• Statement of the confidentiality of the report

B. Executive summary
 briefly describe the business concept
 Any data that support the opportunity for this venture should be briefly describe.
 Highlight some of the key financial result
 Executive summary should be limited to 2 or 3 pages

E. Production plan (How product will be manufactured. If the new venture is

manufacturing operation, a production plan is necessary. This section will be titled
operational plan if the new venture is not manufacturing operation)
 Manufacturing process
 Physical plant layout
 Machinery & equipment
 Names of suppliers of raw material

F. Marketing plan: (Describes market conditions and strategy related to how products
and services will be described, priced and promoted)
 Pricing
 Distribution
 Promotion
 Product forecasts

G. Organizational Plan : (Describes forms of ownership and line of authority and

responsibility of members of new ventures)
 Forms of ownership
 Identification of partners
 Authority of principals
 Management team background
 Roles and responsibilities of members of organization

H. Assessment of risk (Identifies potential hazards and alternative strategies to meet

business plan goals and objectives)
 Evaluate weakness of business
  New technologies
 Contingency plans

I. Financial plan: (Projection of key financial data that determine economic feasibility
and necessary financial investment commitment)
 Projected Income statement
 Cash flow projections
 Break even analysis
 Sours and application of funds

J. Appendix: (Any backup document that is not necessary in the text of the document)
 Letters
 Market research data
 Price list from suppliers
۞Writing the business plan

The business plan should be comprehensive enough to give a potential investor a

complete understanding of the venture.

Introductory Page
The title page provides a brief summary of the business plan’s contents, and should
include:
 The name and address of the company
 The name of the entrepreneur and a telephone number
 A paragraph describing the company and the nature of the business
 The amount of financing needed
 A statement of the confidentiality of the report
It also sets out the basic concept that the entrepreneur is attempting to develop.

Executive Summary
This is prepared after the total plan is written. It should be three to four pages in length
and should highlight the key points in the business plan. The summary should highlight
in a concise manner the key points in the business plan.
Issues that should be addressed include:
 Brief description of the business concept
 Any data that support the opportunity for the venture.
 Statement of you this opportunity will be pursued.
 Highlight some key financial results that can be achieved
Because of the limited scope of the summary, the entrepreneur should ascertain what is
important to the audience to whom the plan is directed.

Environmental and Industry Analysis

The entrepreneur should first conduct an environmental analysis to identify trends and
changes occurring on a national and international level that may impact the new venture.
Examples of environmental factors are:
 Economy
 Culture
 Technology
 Legal concerns
 All of the above external factors are generally uncontrollable
Next the entrepreneur should conduct an industry analysis that focuses on specific
industry trends
Some examples of industry factors include:
 Industry demand
 Competition
 
The last part of this section should focus on the specific market. This would include such
information as who the customer is and what the business environment is like. The
market should be segmented and the target market identified.

Description of the Venture

The description of the venture should be detailed in this section. This should begin with the
mission statement or company mission, which describes the nature of the business and what
the entrepreneur hopes to accomplish. The new venture should be described in detail,
including the product, location, personnel, background of entrepreneur, and history of the
venture. The emphasis placed on location is a function of the type of business. Maps that
locate customers, competitors, and alternative locations can be helpful. If the building or site
decision involves legal issues, the entrepreneur should hire a lawyer.

Production Plan or Operations Plan

If a new venture is a manufacturing operation, a production plan is necessary. This plan
should describe the complete manufacturing process, including whether or not the process is
to be subcontracted. If the manufacturing is carried out by the entrepreneur, the plan should
describe the physical plant layout and machinery and equipment needed.
If the venture is not manufacturing, this section would be titled operational plan. The
entrepreneur would need to describe the chronological steps in completing a business
transaction.

Marketing Plan
The marketing plan describes how the products will be distributed, priced, and promoted.
Potential investors regard the marketing plan as critical to the venture’s success.

Organizational Plan
The organizational plan section should describe the venture’s form of ownership. If the
venture is a corporation, this should include the number of shares authorized, share options,
and names and addresses of the directors and officers. It is helpful to provide an organization
chart indicating the line of authority.
This chart shows the investor who controls the organization and how members interact.

Assessment of Risk
It is important that the entrepreneur make an assessment of risk in the following manner: The
entrepreneur should indicate the potential risks to the new venture. Next should be a
discussion of what might happen if these risks become reality. Finally the entrepreneur
should discuss the strategy to prevent, minimize, or respond to these risks. The entrepreneur
should also provide alternative strategies should these risk factors occur.

Financial Plan
The financial plan determines the investment needed for the new venture and indicates
whether the business plan is economically feasible. The entrepreneur should summarize the
forecasted sales and expenses for the first three years. Cash flow figure for three years are
needed, with the first year’s projections provided monthly. The projected balance sheet
shows the financial condition of the business at a specific time.
Appendix
The appendix contains any backup material not included in the text of the document.
 Letters from customers, distributors, or subcontractors
 Secondary or primary research data
 Leases and contracts
 Price lists from suppliers and competitor