BUSINESS PLAN

By: Elieser E.N. Moroña, DTI Region 5

 STEPS IN STARTING A BUSINESS

Consider Product/Service
Self
other ID
Analysis
Factors

Determine Write
Secure Financial
Financing Business
Requirements Plan

Choose Secure Hire &

Location Registration Train
& Permits Personnel

START
 What is a Business Plan?
an operational plan that defines actions what to do
as well as how and when to do it.  Many
entrepreneurs use their business plan for the 
critical start-up and expansion so that they will stay
both on target and within the budget. It consists of
establishing goals for the business and completing
the procedures to reach these goals.
In developing the plan, you should first ask yourself these questions:

1. What would I like the business to

become a year from now?
2. What changes are taking place in
the business and how should I
prepare for it?
3. How can I attain my goals?
4. What timetable should I follow in
accomplishing the plan?
 Importance of a Business Plan
• Serves as :

- Blueprint /Roadmap for building an enterprise

- Vehicle for describing the goals in business: (why goals are
economically and technologically feasible)

• Means to:

– Delineate individual responsibilities

– Project sales, expenses, and cash flows
- Explain to employees what is expected of them
- Improve company performance
- Assists managers in decision making
- Plan for new product development
- Raises capital for a a business or securing capital
What is an Effective Business Plan
• Rigorous standards in evaluation of
B. P. because of many business risks involved;

• Critical to understand how the plan is read by the

investors
Turn on investors?
Turn off investors?

• Know-basis of investors evaluation

Fact: Only A and A+ plans are acceptable

 Thus, a B. P. is not merely a
report that is proposed and then
forgotten and left on the shelf to
collect dust.

Rather, it is a working document

that entrepreneurs should use (weekly
or monthly basis) to ensure continuity
or success in business
 The preparation of a B. P.
makes a better entrepreneur and ensures
business success
General format of a Business Plan

I.  INTRODUCTION

II.  SUMMARY OF THE BUSINESS PLAN

III.  PROPONENT, MGT. & PERSONNEL

IV.  MARKET FEASIBILITY

V.   PRODUCTION

VI.  FINANCIAL FEASIBILITY

DETAILED FORMAT
 Basic Steps to Follow in Business Planning

1 5 9 ID Material
State Your Identify Your Rqmt &
Objectives Competitors Supply
Source

2 6 Consider 10 ID Equipment
Describe Your
Business Your Pricing & Process to
Policy Use

3 7 Determine 11
Describe Your Prepare Sales
Your
Product or Forecast
Marketing
Services
Methods
13

4 8 Determine
Identify Your 12 Prepare Set Your Plan
Potential Your Key
Budget to Work
Markets Personnel
 1.  How do you put a giraffe into a refrigerator?

THE
THECORRECT
CORRECTANSWER ANSWERIS: IS: Open
Openthe the
refrigerator,
refrigerator,put
putininthe
thegiraffe
giraffeand
andclose
closethethedoor.
door.
This
Thisquestion
questiontests
testswhether
whetheryou
youtend
tendtotododosimple
simple
things
thingsininan
anoverly
overlycomplicated
complicatedway.
way.

2. How do you put an elephant into a refrigerator?

WRONG
WRONGANSWER:
ANSWER:Open Openthetherefrigerator,
refrigerator,put
putininthe
the
elephant
elephantand
andclose
closethe
therefrigerator.
refrigerator.

CORRECT
CORRECTANSWER:
ANSWER: Open Openthe therefrigerator,
refrigerator,take
take
out
outthe
thegiraffe,
giraffe,put
putininthe
theelephant
elephantandandclose
closethe
the
door.
door.This
Thistests
testsyour
yourability
abilityto
tothink
thinkthrough
throughthe
the
repercussions
repercussionsofofyour
youractions.
actions.
3.    The Lion King is hosting an animal conference. All
the animals attended except one. Which animal did
not attend?
THE
THECORRECT
CORRECTANSWER ANSWERIS: IS: The
Theelephant.
elephant.The
The
elephant
elephantisisininthe
therefrigerator.
refrigerator. This
Thistests
testsyour
your
memory.
memory. OK,OK,evenevenififyou
youdid
didnot
notanswer
answerthe
thefirst
first
three
threequestions
questionscorrectly
correctlyyouyoustill
stillhave
haveone
onemore
more
chance
chancetotoshow
showyouryourabilities.
abilities.

4. There is a river you must cross. But it is inhabited by

crocodiles. How do you manage to cross it?

THE
THECORRECT
CORRECTANSWER
ANSWERIS: IS:You
Youswim
swimacross.
across. All
All
the
thecrocodiles
crocodilesare
areattending
attendingthe
theAnimal
AnimalMeeting.
Meeting.
This
Thistests
testswhether
whetheryou
youlearn
learnquickly
quicklyfrom
fromyour
your
mistakes.
mistakes.

According
AccordingtotoAndersen
AndersenConsulting
ConsultingWorldwide,
Worldwide,around
around90%
90%ofofthetheprofessionals
professionalsthey
theytested
tested
got all questions wrong. But many pre-schoolers got several correct answers.
got all questions wrong. But many pre-schoolers got several correct answers. Anderson Anderson
Consulting
Consultingsayssays “this
“thisconclusively
conclusivelydisproves
disproves the
thetheory
theory that
that most
mostprofessionals
professionalshave
havethe
the
brains of a four year old”.
brains of a four year old”.
Henry Ford:

“ Coming together is a beginning,

staying together is progress,
and
working together is success.”

- THANK YOU -
2a. Come-Up with Business Idea
Factors to consider…..
INTERNAL FACTORS
 Personal interest
 Knowledge/talent
 Training/work experience
 Other considerations like
income, employment
service, etc
EXTERNAL FACTORS
 government support
& assistance
 tax incentives
 financing
 business growth rate
 other factors
2a. Come-Up with Business Idea
Factors to consider…..
INTERNAL FACTORS
 Personal interest
 Knowledge/talent
 Training/work experience
 Other considerations like
income, employment
service, etc
EXTERNAL FACTORS
 government support
& assistance
 tax incentives
 financing
 business growth rate
 other factors
2b. Choosing the Line of Business
Product Industries
Manufactured products intended either
for mass market or individual customers
demand. Examples are garments, toys,
shoes, canned goods, (for mass
market); precision instruments for
industrial use, made to order furniture
(as specialized products)
Sub Contracting Industries
Manufacture of product components or
parts for other bigger companies.
Bigger companies find it faster &
cheaper to sub contract. Drawback is
if small company is totally dependent on
one big principal or contracting
company
Process Industries
Manufactured products intended either
for mass market or individual customers
demand. Examples are garments, toys,
shoes, canned goods, (for mass
market); precision instruments for
industrial use, made to order furniture
(as specialized products)
Service Industries
Service enterprises include repair and
maintenance shops, printing & machine
shops, food catering, Beauty parlors, dress
and tailoring shops, recreation estabs. (like
bowling alleys and billiard halls), and
entertainment enterprises (such as
theaters, disco and pub house). Retail &
trading is one of the most common type of
service business
 BUSINESS PLAN OUTLINE

Executive Summary III. Description of Competition

I. Description of the Business A. Five Nearest Competitors

A. Type of Business B. Comparison
C. Competition Sales Trends
B. Status of Business
D. Similarities & Dissimilarities
C. Profitability Potential
E. Strengths &/or Weaknesses
D. Business Days/Hours F. Insights
E. Uniqueness of Business
F. Contract Terms
IV. Location of the Business
II. Description of Market
A. Demographics
A. Address
B. Size
B. Physical Features
C. Market Share
C. Leased or Owned
D. Potential Growth D. Terms
E. Satisfying Market E. Neighborhood
F. Competitive Pricing F. Zoning
G. Pricing Determination G. Other Businesses
H. Advantages H. Location Considerations
 BUSINESS PLAN OUTLINE, cont’d.

V. Description of Management
A. Background
B. Management Experience VII. Business History
C. Education
A. Balance Sheets -- 3 Years
D. Personal Data
B. Income Statements -- 3 Years
E. Operational Experience In This
C. Tax Returns
Business
D. Sales Trends
F. Management Experience In This
E. Explain Trends
Business
G. Reporting Responsibilities
H. Salaries VIII. Financial Data
I. Other Resources A. Source & Uses of Funds
J. Financial Information       (Listing of funds by major category)
B. Capital Expense
VI. Personnel B1. Capital Equipment List
A. Five Year Projection B2. Renovations
B. Skills B3. Inventory
C. Labor Pool B4 Working Capital
D. Full/Part Time
E. Wages
F. Competitiveness
G. Training
 BUSINESS PLAN OUTLINE, cont’d.

C. Pro-Forma Balance Sheet

3 Years F. Income Projections

Current Asserts
Fixed Assets
Current Liabilities
Fixed Liabilities
Net Worth
D. Pro-Forma Cash Flow
First Year -- Detail by Month
Notes of Explanation
Three Year Summary
Notes of Explanation
G. Financial Analyais
Break-even Analysis
ROI
Payback Period
Profit Margin Ratio

E. Pro-Forma Cash Flow

Three Year Summary
Notes of Explanation
How to Turn On Investors/Banks/ Clients

It must demonstrate the ff. features:

1. A clear definition of the business - VMG

what business are you in? what is the product or
service ; what is the industry; who, where, what is
the target market
Investors will always look for something extra

2. What is the industry – should have growth potential

/corridor syndrome / riding the growth curve/
innovative products