SESSION-2 Business Plan Development Objectives: To define what the business plan is, and who prepares it To understand the scope and value of the business plan to investors, lenders, employees, suppliers, and customers To identify information needs and sources for each critical section of the business plan To present examples and a step-by-step explanation of the business plan To present helpful questions for the entrepreneur at each stage of the planning process

What is Business Plan? BP is ….. a written document prepared by the entrepreneur that describes all the relevant external and internal elements involved in starting a new venture Useful for new venture or for the expansion of the existing business

A Good Business Plan is... complete short integrated prepared for the audience organized

Who should write the plan? Entrepreneur, with: Lawyer Accountant Financial consultant Marketing consultant Engineer, etc. or: Professional consultant Source of information: Gov. Agency University Association Internet etc.

How is BP evaluated? Suppliers: Customers: Lenders/Bank: Investors: to supply components or finished goods, the number of materials, etc. Customers: products, quality, quantity, after sales service, etc. Lenders/Bank: the ability to pay back the debt, potential risk, etc. or 4 Cs of credit (character, cash flow, collateral, equity contribution) Investors: pay back period, ability to generate income (return), etc.

Information needs: Production and operation information needs: location, manufacturing operations, raw material, equipment, labor skills, space, overhead Marketing information: market potential, STPD (Segmentation, Targeting, Positioning, Differentiation) Financial information needs: Sales forecasting, capital expenditures, direct operating expenses, etc.

Outline of BP: Introductory Page Executive Summary Environmental and Industry Analysis Description of Venture Production Plan Operational Plan Marketing Plan Organizational Plan Assessment of Risk Financial Plan Appendix

I. Introductory Page Name and Address Name of the entrepreneur(s), telp number, e-mail address, student ID Nature of Business Statement of Financing Needed Statement of Confidentially Report

IV. Description of Venture Product(s) and or Service(s) Size of Business Office Equipment and Personnel Background of Entrepreneurs

Let’s do it! Finalize the business idea, etc. Finalize the organization structure Compose Chapter I and IV