Vishnu Parmar, IBA, University of Sindh, Jamshoro The Business Plan Vishnu Parmar, IBA, University of Sindh, Jamshoro

What is Business Plan? Business Plan is a written document describing all relevant internal and external elements and strategies for starting a new venture

Who should write the Plan? Business should be prepared by the Entrepreneur with the help of Lawyers, Accountants, marketing consultants, and Engineers.

Who reads the Business Plan? Business Plan may be read by Employees, Investors, Bankers, Venture Capitalists, Suppliers, Customers, Advisors, and Consultants Three perspectives must be consider: Entrepreneur Marketing (from customers perspective) Investors

How do Potential Lenders and Investors Evaluate the Plan? Lenders focus on 4 Cs Character Cash flow Collateral Contribution Equity

Information Needs Quick feasibility Study to see the possible barriers

Market Information Define the Market (Buyers and Market Segmentation) Upside-down pyramid Approach General Environment and Demographic Trend National Industry Trend Local Environment and Demographic Trend Local Industry Trend Local Competition (Strength & Weaknesses) Market Positioning Market Objectives

Operations Information Needs Location Manufacturing Operations Raw Materials Equipment Labor Skills Space Overhead

Financial Needs Prepare Budget Expected Income and Expenditures Bench Marks or Financial Ratios

Outline of Business Plan 1. Introductory Page 2. Executive Summary 3. Industry Analysis 4. Description of Venture 5. Production Plan 6. Operational Plan 7. Marketing Plan 8. Organizational Plan

Outline of Business Plan 9. Organizational Plan 10. Assessment of Risk 11. Financial Plan 12. Appendix

Why Some Business Plans Fails? Goals set by the entrepreneurs are unreasonable Goals are not measurable The entrepreneur has not made total commitment to the business or to the family The entrepreneur has no experience in the planned business

Why Some Business Plans Fails? The entrepreneur has no sense of potential threats or weaknesses to the business No customer need was established for the proposed product or services