1. A Business Plan for the Entrepreneur

2. What Is A Business Plan?
A business plan is a written description of your business's future. That's all there is to it -a document that describes what you plan to do and how you plan to do it.

3. Why bother with a business plan?
Reasons may include:
giving businesses a clear picture of the various stages they need to go through in order to be successful;
setting goals and objectives for the business, in both the short and long term;
ensuring the monitoring and reviewing of progress is made more straightforward;
persuading other stakeholders to, for example, finance a business, both as it is starting up and then as it is growing.

4. What Do I Have To Do? You will need to understand:
why businesses create business plans,
the different parts of a business plan
the constraints that can affect the successful implementation of a business plan.

5. Areas Covered
AO1 – Why do business create plans, what information do they contain and what are the constraints that can impact on a successful implementation.
AO2 – Targeting your plan- your business plan
AO3 – Analysis of primary and secondary research
AO4 – Critical evaluation of your plan

6. AO1 There are 9 marks available for this section:
“You demonstrate a clear and comprehensive understanding of:
the reasons behind creating a business plan,
the different parts of a business plan
the constraints that can impact on the successful implementation of a business plan;”
To get high marks in this section, your evidence must display both breadth and depth.

7. AO2
There are 14 marks available in this section: “You target your business plan to the specific needs of your new enterprise.”

8. AO3
There are 12 marks available in this section: “Your analysis and interpretation of your data is thorough and comprehensive and there is an extensive focus on targeting your research and analysis into the development of your business plan; your synthesis of material is comprehensive, with frequent demonstration of integrated and strategic thinking;”

9. AO4
There are 15 marks available “Your critical evaluation of how, and in what ways, constraints may impact on the successful implementation of your business plan is comprehensive and in-depth and your research and analysis, resulting in reasoned, appropriate, logical conclusions; you demonstrate clarity, coherence and fluency with effective and confident use of appropriate business terminology.”

10. Information Within the Plan
Business plans are usually divided up into 5 key sections:
Preliminary information
Marketing plan
Production plan
Financial plan
Human resources plan

11. Marketing Plan
Businesses need to make informed judgements about the likely sales-levels of products and services.
You will need to know and understand how businesses analyse the market in which they operate.

12. Marketing Plan You will need to understand:
The use of primary data in market research;
The use of secondary data in market research;
Factors affecting the demand for a particular product or service;
Methods of identifying and analysing competition;
Use of marketing models: – SWOT (Strengths, Weaknesses, Opportunities and Threats); – PEST (Political, Economical, Social and Technological) ; – Ansoff matrix; – product life-cycle; – Boston matrix

13. Within the marketing plan you need to discuss the following:
Primary research
Secondary research

14. Primary Research Field (usually looked at secondly)
Important because you know its up to date,
It meets the needs of your business
Generally five kinds of primary research
Observation
Experimentation
Surveys
Questionnaires
Focus groups

15. Needs to be qualitative and quantitative
Qualitative is about how people behave
Quantitative concerned with facts and figures.

16. Do you drink coffee?
Yes No
How often do you drink coffee per day? 1 2 3 4 5 6
How much would you pay for a cup of coffee
£0.50-£0.99
£ £1.49
£1.50-£1.99
Quantitative questions
Strongly Agree
Agree
Neither
Disagree
Strongly Disagree
Do you prefer organic coffee?
Is price important?
Example of Likert Scaling

17. Secondary Research Also known as desk research
Explain that you might refer to this first
Where might you get some of this information?
Government statistics – dti, ons, statistics
Market research companies – Mintel, Mori, CIM
Consumers’ associations – Which, Trading Standards, national Consumer Council
Newspapers – Times, Telegraph, Economist, Trade magazines
National and international agencies – World bank, International Trade Centre and International Labour organizations
Competitors information – websites, catalogues, loyalty card

18. Secondary Data Spending habits Legislative changes Population changes
Costs of distribution
Industrial developments
Spending habits
Effectiveness of promotions

19. Factors affecting the demand for a product or service
Quality of the good or service – niche market, or mass produced lower end of market i.e. hand made wedding dress or off the peg
Product range and its image, i.e. clothing and or accessories, Apple, Jack Wills etc
Essential or Luxury. Is it a special occasion or linked to other festivals or special occasions (bread, xmas trees)
Lifestyle of customers. Related to sport, healthy living, hobbies or interests, commonwealth inspired people to do more sport

20. Income of potential customers – more disposable income we have the more we buy!
After sales purchase – guarantees and warranties
Level of availability- online, high street
Level and type of competition – what makes a customer come to you rather than your competitors

21. SWOT Analysis, remember its only as good as the info you put in it
SWOT Analysis, remember its only as good as the info you put in it. SW – inside the business, OT outside
PEST – explain how these will affect your business
Ansoff’s Matrix
Product Life cycle
Boston Matrix

22. Ansoff’s Matrix

23. Market penetration
Market penetration is the name given to a growth strategy where the business focuses on selling existing products into existing markets.
Market penetration seeks to achieve four main objectives:
Maintain or increase the market share of current products – this can be achieved by a combination of competitive pricing strategies, advertising, sales promotion and perhaps more resources dedicated to personal selling
Secure dominance of growth markets
Restructure a mature market by driving out competitors; this would require a much more aggressive promotional campaign, supported by a pricing strategy designed to make the market unattractive for competitors
Increase usage by existing customers – for example by introducing loyalty schemes
A market penetration marketing strategy is very much about “business as usual”. The business is focusing on markets and products it knows well. It is likely to have good information on competitors and on customer needs. It is unlikely, therefore, that this strategy will require much investment in new market research.

24. Market development
Market development is the name given to a growth strategy where the business seeks to sell its existing products into new markets.
There are many possible ways of approaching this strategy, including:
New geographical markets; for example exporting the product to a new country
New product dimensions or packaging: for example
New distribution channels (e.g. moving from selling via retail to selling using e-commerce and mail order)
Different pricing policies to attract different customers or create new market segments
Market development is a more risky strategy than market penetration because of the targeting of new markets.

25. Product development
Product development is the name given to a growth strategy where a business aims to introduce new products into existing markets. This strategy may require the development of new competencies and requires the business to develop modified products which can appeal to existing markets.
A strategy of product development is particularly suitable for a business where the product needs to be differentiated in order to remain competitive. A successful product development strategy places the marketing emphasis on:
Research & development and innovation
Detailed insights into customer needs (and how they change)
Being first to market

26. Diversification
Diversification is the name given to the growth strategy where a business markets new products in new markets.
This is an inherently more risk strategy because the business is moving into markets in which it has little or no experience.
For a business to adopt a diversification strategy, therefore, it must have a clear idea about what it expects to gain from the strategy and an honest assessment of the risks. However, for the right balance between risk and reward, a marketing strategy of diversification can be highly rewarding.

27. Product Life cycle

28. Boston matrix

29. The Boston Matrix makes a series of key assumptions:
Market share can be gained by investment in marketing
Market share gains will always generate cash surpluses
Cash surpluses will be generated when the product is in the maturity stage of the life cycle
The best opportunity to build a dominant market position is during the growth phase

30. Stars are high growth products competing in markets where they are strong compared with the competition. Often Stars need heavy investment to sustain growth. Eventually growth will slow and, assuming they keep their market share, Stars will become Cash Cows
Cash cows are low-growth products with a high market share. These are mature, successful products with relatively little need for investment. They need to be managed for continued profit - so that they continue to generate the strong cash flows that the company needs for its Stars
Question marks are products with low market share operating in high growth markets. This suggests that they have potential, but may need substantial investment to grow market share at the expense of larger competitors. Management have to think hard about “Question Marks” - which ones should they invest in? Which ones should they allow to fail or shrink?
Unsurprisingly, the term “dogs” refers to products that have a low market share in unattractive, low-growth markets. Dogs may generate enough cash to break-even, but they are rarely, if ever, worth investing in. Dogs are usually sold or closed.