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The business plan


THE BUSINESS PLAN Prepared by: Mrs. Belen Apostol – PowerPoint PPT presentation

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Title: The business plan

The business plan
  • Prepared by Mrs. Belen Apostol

The Business Plan
  • Potential investors are not likely to consider
    investing in a new venture until the business
    plan has been completed
  • The business plan helps the entrepreneur maintain
    perspective as to what
    needs to be accomplished.

Organizing the Enterprise, Planning the Enterprise
  • Entrepreneurs use planning and organizing to
    outline goals and define how the organization
    will accomplish business tasks. They may use a
    systematic plan broken down into steps or develop
    a generalized approach for achieving goals
    through various functions or processes.

Organizing the Enterprise, Planning the Enterprise
  • Strong planning and organization techniques
    ensure the enterprise stays focused on its goals
    and objectives.
  • Proper planning and organization management can
    also help the business remain flexible and adjust
    to changes in the economic environment.

Concept of a Business Plan
  • 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

Components of Business Planning
  • 1. Sales and Marketing
  • Any sales and marketing decision made must be
    based on a realistic sales estimate over the
  • 2. "Igniting Operations
  • Operational decisions cover Production,
    Engineering, Distribution, Human Resources, and
    Information Communication and Technology.
  • 3. Technology
  • The use of Technology can generate a
    significant market advantage that
    competitors find difficult to match.

Characteristics of a Sound Business Plan
  • 1. A business plan should be detailed. In listing
    products and services for example, it should not
    stop by just enumerating them, it should include
    the descriptions and scope of the products and
  • 2. It should include a market research that
    identifies competitors, the share of the market
    and the range of the products produced. By
    learning how competitors conduct their
    operations, tricks of the
    trade in the business may be
    and entered to be used as a basis to

Characteristics of a Sound Business Plan
  • 3. It needs to have a list of everything needed
    which comprises the equipment, technology, raw
    materials, financial and other resources needed
    when starting and running a business venture.
    Having all these listed will give an idea on how
    much capital is needed before the start-up and
    how much money should made in a day to make the
    business survive.

Characteristics of a Sound Business Plan
  • 4. It also needs to be written in formal format
    and style since a business plan is something that
    have to be presented to business partners,
    financial firms and banks. Refrain from using
    slang in any part of the plan
  • 5. A business plan should be error free. This
    is important because the business plan defines
    the business person.

Why do we need a Business Plan
  • 1. A business plan is an effective tool for
    defining the existing realities. It prompts
    to analyze the business project or the existing
    situation objectively and critically, define a
    focus and set realistic goals. It may also
    constitute the basis for control and evaluation.

Why do we need a Business Plan
  • 2. A good business plan will reveal weaknesses
    or omissions in planning. Because good business
    plans require a guesstimate of risk calculation,
    it helps to reduce risks.

Why do we need a Business Plan
  • 3. It provides a valuable communication tool
    presented in an organized, credible manner, which
    allows lenders, outside directors, investors,
    banks and employees to obtain a complex view of
    your business. Even if, in some cases, a business
    plan format is not officially required when
    applying for a loan, although most lenders will
    ask for one, the very existence of a plan
    constitutes a plus, a step forward in obtaining
    the loan.

Obtaining the facts for a Business Plan
  • A business plan gives an insight into the
    entrepreneur's ability to define and develop
    policies for the essential areas of the business.
    This business document will map out the entire
    process by considering all the possible factors.

Obtaining the facts for a Business Plan
  • Fundamental factors that is needed in creating a
    business plan
  • 1. Consultants and Backing Type When starting to
    create a business plan, one must decide who will
    be reviewing it as this could help form a great
  • 2. Business Plan Outline Outlining the plan for
    the business is the second most vital point once
    it has targeted its audience. The target audience
    will determine the structure of your document..

Obtaining the facts for a Business Plan
  • Fundamental factors that is needed in creating a
    business plan
  • 3. Research and Information Collection Once
    decided on the financial investment and its
    sources, it is time to make a research. The
    approach from the work experience of the
    entrepreneur and observation will help to
    research the market and the product. Published
    information from library, internet and paid
    database services will inform the entrepreneur on
    the market growth, overall industry outlook and
    customer requirements. Field research will help
    in covering interviews with customers, suppliers,
    competitors, and industry experts.

Obtaining the facts for a Business Plan
  • Fundamental factors that is needed in creating a
    business plan
  • 4. Collection Files sum up all experiences,
    interviews, and research in files for the plan
  • 5. General Industry Overview have a general
    understanding of the industry and the knowledge
    about the various strategies and services that
    apply in developing the business.

Obtaining the facts for a Business Plan
  • Fundamental factors that is needed in creating a
    business plan
  • 6. Analysis Once data is collected, analyze the
    process of building an aggressive profile, a
    comprehensive plan and consider the risks
    involved with it.
  • 7. Executive Summary When all the segments of
    the business plan is thoroughly completed write
    an executive summary highlighting the key points
    and including the loan repayment methods and
    return on investments.

Obtaining the facts for a Business Plan
  • 8. Review and Editing a well-written business
    plan opens the doors to success. It will become a
    road map to success, which guides the
    entrepreneur in the right direction. Therefore,
    make sure that it has been proofread and checked
    for a number of times before giving a final copy.

Outline of a Business Plan
  • The Executive Summary
  • The Executive Summary provides a concise synopsis
    of the business plan, and highlights the key
    points raised within. The Executive Summary must
    communicate to the prospective investor the size
    and scope of the market opportunity, the
    ventures business and profitability model, and
    how the resources/skills/strategic positioning of
    the Companys management team make it uniquely
    qualified to execute the plan. The Executive
    Summary must be compelling, easy-to-read, and no
    longer than 2-4 pages.

Outline of a Business Plan
  • The Industry
  • This section evaluates the playing field in which
    the company will be competing, and includes
    well-structured answers to key market research
    questions such as the following
  • What are the sizes of the target market segments?
    What are the trends for the industry as a whole?
    With what other industries do your services

Outline of a Business Plan
  • Market Analysis
  • This section assesses the customer segment(s)
    that the company serves. In this section, the
    company must convey the needs of its target
    customers. It must then show how its products and
    services satisfy these needs to an extent that
    the customer will pay for them.

Outline of a Business Plan
  • Competitive Analysis
  • An investigation of direct and indirect
    competitors, with an assessment of their
    competitive advantage and an analysis of how it
    will overcome any entry barriers to the chosen

Outline of a Business Plan
  • Marketing Plan
  • A detailed explanation of the sales strategy,
    pricing plan, proposed advertising and promotion
    activities, and product or service's benefits.

Outline of a Business Plan
  • Management Plan
  • An outline of the business's legal structure and
    management resources, including the internal
    management team, external management resources,
    and human resources needs.
  • The Management Team section demonstrates that the
    company has the required human resources to be
    successful. The business plan must answer
    questions including
  • Who are the key management personnel and what are
    their backgrounds? What management additions will
    be required to make the business a success?
  • Who are the other investors and/or shareholders,
    if any?
  • Who comprises the Board of Directors and/or Board
    of Advisors?
  • Who are the professional advisors (e.g., lawyer,
    accounting firm)?

Outline of a Business Plan
  • Operating Plan
  • A description of the business's physical
    location, facilities and equipment, kinds of
    employees needed, inventory requirements and
    suppliers, and any other applicable operating
    details, such as a description of the
    manufacturing process.
  • These sections detail the internal strategies for
    building the venture from concept to reality, and
    include answers to the following questions
  • What functions will be required to run the
  • What milestones must be reached before the
    venture can be launched?
  • How will quality be controlled?

Outline of a Business Plan
  • Financial Plan
  • A description of the funding requirements,
    detailed financial statements, and a financial
    statement analysis.

Outline of a Business Plan
  • Appendices and Exhibits
  • Any additional information that will help
    establish the credibility of the business idea,
    such as marketing studies, photographs of the
    product, and/or contracts or other legal
    agreements pertinent to the business.
  • The Appendix is used to support the rest of the
    business plan. Every business plan should have a
    full set of financial projections in the
    Appendix, with the summary of these financials in
    the Executive Summary and the Financial Plan.
    Other documentation that could appear in the
    Appendix includes technical drawings, partnership
    and/or customer letters, expanded competitor
    reviews and/or customer lists.

Market Plan
  • The marketing plan details the strategy for
    penetrating the target markets. Key components
    include the following
  • A description of the companys desired strategic
  • Detailed descriptions of the companys product
    and service offerings and potential product
  • Descriptions of the companys desired image and
    branding strategy
  • Descriptions of the companys promotional
  • An overview of the companys pricing strategies
  • A description of current and potential strategic
    marketing partnerships/ alliances

Production Plan
  • A production plan is that portion of the
    intermediate-range business plan that the
    manufacturing / operations department is
    responsible for developing. The plan states in
    general terms the total amount of output that the
    manufacturing department is responsible to
    produce for each period in the planning horizon.

Production Plan
  • The output is usually expressed in terms of pesos
    or other units of measurement (e.g. tons, liters,
    kgs.) or units of the aggregate product (this
    refers to the weighted average of all the
    products in the company). The production plan is
    the authorization of the manufacturing department
    to produce the items at a rate consistent with
    the company's overall corporate plan.

Production Plan
  • This production plan needs to be translated into
    a master production schedule so as to schedule
    the items for completion promptly, according to
    promised delivery dates to avoid the overloading
    or under loading of the production facility and
    so that production capacity is efficiently
    utilized and low production costs result.

Organizational Plan
  • An organizational plan is basically a to do
    list for an organization. It lists out the plan
    of work, programs and organizational growth over
    a period of time. The tasks involved, who is
    responsible for them, and when theyll be done.
  • An organizational plan helps to
  • Set priorities for work
  • Make sure tasks get done on time
  • Focus on one thing at a time
  • Share work among staff, board members
  • Make goals clear to investors
  • Get a handle on big projects by breaking them
  • See the big picture of what an organization is

Financial Plan
  • The Financial Plan involves the development of
    the companys revenue and profitability model. It
    includes detailed explanations of the key
    assumptions used in building the model,
    sensitivity analysis on key revenue and cost
    variables, and description of comparable
    valuations for existing companies with similar
    business models.

Financial Plan
  • In addition, the financial plan assesses the
    amount of capital the firm needs, the proposed
    use of these funds, and the expected future
    earnings. It includes Projected Income
    Statements, Balance Sheets and Cash Flow
    Statements, broken out quarterly for the first
    two years, and annually for years 1-5.
    Importantly, all of the assumptions and
    projections in the financial plan must flow from
    and be supported by the descriptions and
    explanations offered in the other sections of the
    plan. The Financial Plan is where the
    entrepreneur communicates how he/she plans to
    monetize the overall vision for the new

Organizing the Enterprise
  • Common structural and operating components and
    all businesses include a series of jobs to be
    done and a specific overall purpose. Each
    organization must develop the most appropriate
    organizational structure -- the specification of
    the jobs to be done in the ways in which they
    relate to one another.

Organizing the Enterprise
  • Firms prepare organization charts to clarify
    structure and to show employees were they fit
    into a firm's operations. Each box represents a
    job, and solid lines define the chain of command,
    or reporting relationships. The charts of large
    firms are complex and include individuals and
    many levels. Because size prevents them from
    charting every manager, they may create single
    organization charts for overall corporate
    structure and separate charts for divisions.

Choosing Your Own Role in the Business
  • Your role within your business organization is of
    crucial importance to investors because you may
    very well make the difference between the success
    or failure of your business.
  • You should be able to describe exactly what part
    you will play in managing your business how you
    are going to compensate for your own weaknesses,
    such as lack of experience in certain areas or
    lack of knowledge.

Choosing Your Own Role in the Business
  • When you detail your role in your business, you
    describe your weak areas with respect to your
    role and outline how you plan to maximize your
    strengths and keep your own shortfalls at bay.
  • To confirm your qualifications, you need to
    establish your involvement in the overall,
    long-term planning for the company and establish
    your involvement in the day-to-day running of the
  • Establish your qualifications, including your
    education background and your business

Choosing Your Own Role in the Business
  • If you have industry specific experience, you
    should detail that as well.
  • If you don't have much experience in the industry
    you will be operating in, then you need to
    provide some insight as to how you are going to
    acquire the necessary knowledge to operate

Choosing Your Own Role in the Business
  • If you will not be involved in the day to day
    functions of your business, you need to establish
    who will be taking on the responsibility as a
    general manager.
  • It is important to the security of your deal that
    you provide investors with sufficient information
    to be confident in the person (whether it is you
    or someone else) who will be managing the
    business and monitoring its performance.

Choosing People to Work With You
  • Identifying the Skills Your Business Needs But
  • The best way to find the right people for your
    business is by indentifying the jobs that need to
    be done, and then working out what type of person
    is needed to do them.
  • Make a list of jobs that need to be filled now
    and in the future. 
  • Next to each item, note whether you or someone
    else will need to do that job.
  • Group tasks for specific roles and then create
    job specs accordingly.
  • Include a detailed list of responsibilities, and
    any qualifications or experience required for
    that role.

Choosing People to Work With You
  • Finding the Right Applicants
  • A good way to find employees is by
  • Trade publications are also a good bet if you are
    looking for a specific skill set and there are
    now many online websites that allow you to easily
    post job advertisements as well.

Choosing People to Work With You
  • Interviewing a Potential Employee
  • When you interview a candidate for a job, make
    sure to prepare a list of questions in advance.
  • This should include questions relating to their
    experience, suitability, and attitude towards
  • Ask them how they would deal with various
    scenarios relevant to the potential role in your

Choosing People to Work With You
  • Choosing the Right Candidate
  • Finding the right type of employee isnt just
    about finding someone with the right skill set.
  • You need to enjoy their company considering how
    much time you will be spending with them.
  • Many entrepreneurs go into business with people
    they dont particularly like or get on with
    because they think the potential candidate is
  • Working with someone who winds you up, no matter
    how good their credentials, is not a recipe for
    your own motivation or business success!

Choosing People to Work With You
  • Go With Your Instinct
  • Go with your gut.
  • If you instinctively believe someone wont be a
    good fit, then youre probably right.
  • Try Before You Hire
  • An interview or discussion wont always reveal
    whether someone is suitable
  • Some people are good at interviews but not on the
  • Always try working with someone before you hire
    them full-time.

Choosing the Legal Form of Your Business
  • Each type of business is best for a specific
    purpose or situation, relating to taxes,
    liability, and your ability to control the
    profits and losses of the business.
  • Sole Proprietorship
  • A sole proprietorship is a business operated by
    one individual the business is considered part
    of the individual, not a separate entity.
  • The business profits and losses are included on
    the individual's personal tax return, and the
    individual retains personal liability for the
    business debts and lawsuits.

Choosing the Legal Form of Your Business
  • Partnership
  • A partnership is a business entity with two or
    more individuals who share the risk and benefits
    of business.
  • A partnership may include general partners, who
    bear the liability for partnership debts and for
    actions of the partnership.
  • It may also include limited partners who are
    merely investors and who do not share in the
    day-to-day operations of the business and who do
    not share in liability.

Choosing the Legal Form of Your Business
  • Corporation
  • A corporation is an entity which is separate from
    its owners.
  • The corporation is formed under the laws of the
    state in which it is operating, with Articles of

Choosing the Legal Form of Your Business
  • Cooperative
  • A cooperative is an organization composed of
    individuals or businesses that have banded
    together to reap the benefits of belonging to a
    large organization.
  • Cooperatives are not organized for profit but to
    make its members individually profitable or save

The Option Not to Register
  • There is no option not to register for a certain
    business since setting up a business in the
    Philippines, as in other countries, will require
    the business owner to register with several
    government agencies.
  • For a company to be legitimate it must have
    records in different government agencies such as
  • Department of Trade and Industry (DTI),
  • Securities and Exchange Commission (SEC),
  • Bureau of Internal Revenue (BIR),
  • Social Security System (SSS),
  • Philippine Health Insurance Corporation
  • Home Development Mutual Fund (usually referred to
    as Pag-IBIG).

The Option Not to Register
  • The company must also obtain various clearances
    from local government and sanitation agencies.
  • Once these registrations are done, an
    entrepreneur is ready to launch the business in
    the Philippines and may start hiring employees
    and accepting customers.

How to Register Your Business
  • How to Register Your Business In The Philippines
  • There are a number of government agencies you
    must register with in addition to opening a bank
    account when starting a business in the
    Philippines and hiring employees. 
  • It is essential to register your business to
    avoid any legal problems once business operations

How to Register Your Business
  • How to Register Your Business In The Philippines
  • Depending on the structure of your business, your
    first step is to get a certificate of
    registration for your business name in one of
    these agencies
  • Department of Trade and Industry (DTI) for
    single proprietorship
  • Securities and Exchange Commission (SEC) for
    partnerships or corporations
  • Cooperative Development Authority (CDA) for

How to Register Your Business
  • How to Register Your Business In The Philippines
  • After getting your certificate of registration,
    you will need to visit the following offices
  • Homeowners Association for businesses inside
    villages and subdivisions, you need to get a
    homeowners clearance
  • Barangay Hall secure a barangay clearance to
    operate your business
  • Local Government Unit (LGU) visit the
    municipality or city hall office and process your
    business permit
  • Bureau of Internal Revenue (BIR) apply for a
    business taxpayer identification number (TIN),
    register your books of accounts, point-of-sales
    (POS) machines and receipts

How to Register Your Business
  • How to Register Your Business In The Philippines
  • At this point, you may now legally start your
    business operations, but youll need to then
    register your employees (which may include
    yourself) to the following agencies
  • Social Security System (SSS) secure an SSS
    number for yourself and your employees
  • Department of Labor and Employment (DOLE) for
    businesses with five workers or more, register
    your business with DOLE
  • Home Development Mutual Fund (HDMF) as required
    by RA 7742, SSS members earning at least P4,000 a
    month must be registered with HDMF. This agency
    administers the Pag-Ibig Fund.
  • Philippine Health Insurance Corp. (PhilHealth)
    all employers of are required to register their
    employees to this agency as stated in the New
    National Health Insurance Act (RA 7875 / RA
    9241). PhilHealth manages and administers the
    government health care system.

Other Registering Agencies
  • Furthermore, there are certain businesses that
    are required to secure a special clearance,
    permit or license from selected government
    agencies as follows
  • Animals, animal products, animal facilities,
    veterinary drugs registration certificate from
    the Bureau of Animal Industry
  • Aquatic animals, importation, fishpond lease
    agreement permit from the Bureau of Fisheries
    and Aquatic Resources (DA-BFAR)
  • Fertilizer products, pesticide products
    registration certificate from the Fertilizer and
    Pesticide Authority (DA-FPA)

Other Registering Agencies
  • Fiber, fiber products processing and trading
    registration certificate and commodity clearance
    from the Fiber Development Authority (DA-FIDA)
  • Film and television production and distribution
    registration certificate from the Movie
    Television Review and Classification Board
  • Firearms, ammunition and explosives permit from
    the Firearms and Explosives Division of the
    Philippine National Police (FED-PNP)

Other Registering Agencies
  • Food, chemicals, health related business
    registration certificate from the Bureau of Food
    and Drugs, Department of Health (DoH-BFAD)
  • Flour, corn and grains related business
    operations and license from the National Food
    Authority (DA-NFA)
  • Pawnshop, lending and finance related businesses
    registration certificate from the Central Bank of
    the Philippines, Department of Finance (DoF-BSP)
  • Plants and plant products nursery accreditation,
    registration, seed and phytosanitary certificates
    from the Bureau of Plant Industry (DA-BPI)

Other Registering Agencies
  • Recruitment or placement agency for foreign
    employment registration certificate from the
    Philippine Overseas Employment Administration,
    Department of Labor (DOLE-POEA)
  • Recruitment or placement agency for local
    employment registration certificate from the
    Bureau of Local Employment (DOLE-BLE)
  • Schools, technical-vocational and other
    educational institutions registration,
    accreditation and permits from the Department of
    Education (DepEd), Commission on Higher Education
    (CHEd) or from the Technical Education Skills
    Development Authority (DOLE-TESDA)

Other Registering Agencies
  • Security agency business permit from the
    Philippine National Police, Department of
    Interior Local Government (DILG-PNP)
  • Meat plant and slaughterhouse operations
    accreditation and registration certificate from
    the National Meat Inspection Commission (DA-NMIC)
  • Mining, quarrying, logging, waste management and
    related businesses permit from the Department of
    Environment and Natural Resources (DENR)

Other Registering Agencies
  • Motor vehicles, automotive heavy equipment,
    engineering, electronics, electrical, office
    data equipments, medical industrial equipment,
    appliances devices accreditation license from
    the Bureau of Trade Regulation and Consumer
    Protection (DTI-BTRCP)
  • Real estate projects register with the Housing
    and Land Use Regulatory Board (HLURB)
  • Sugar, muscovado, sugar-based products and
    related businesses registration certificate from
    the Sugar Regulatory Administration (DA-SRA)

Other Registering Agencies
  • Telecom business license from the National
    Telecommunication Commission, Department of
    Transportation Communication (DOTC-NTC)
  • Tourism-related projects registration and
    accreditation certificate from the Department of
    Tourism (DOT)
  • Transportation permits from the Land Transport
    Franchise Regulatory Board (DOTC-LTFRB) or
    Maritime Industry Authority (DOTC-MARINA)
  • Video production, sales and rental accreditation
    from the Optical Media Board, Office of the
    President (OPOMB)
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