Business Plan

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BUSINESS PLAN
Ahmad Tajudin Ariffin Assoc. Prof. Hjh. Fauziah
Pawan Assoc. Prof. Dr. Hj. Saridan Abu Bakar
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Learning Outcome

• At the end of the module, students should be
  able to
• understand what is a business plan and reasons
  for preparing it
• understand the format of a business plan
• prepare a business plan and
• present a business plan

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What Is a Business Plan?
A business plan is a written document which
described the proposed business or project to be
undertaken in a comprehensive manner. It is also
known as a working paper, business proposal,
project paper or prospectus.
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• Reasons For Preparing a Business Plan

• Opportunity for entrepreneur to assess the
  business
• venture objectively, critically and practically.
  
• To study and evaluate the feasibility of the
  business.
• To convince venture capitalists, investors and
  bankers in order to raise capital and obtain
  support for the venture.
• 4. As a guideline for day-to-day management of
  the business.
• 5. To be able to distribute business resources
  more effectively.

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• Readers of the Business Plan

1. Entrepreneurs 2. Investors 3. Bankers 4. Financ
ial Assistance Providers 5. Suppliers 6. Customers
7. Employees
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Format Overview

• Introduction
• Purpose of business plan
• Company background
• Owner(s) background
• Business location
• Marketing plan
• Operations plan
• Organizational plan
• Financial plan

• Cover Letter
• Cover Page
• Table of Contents
• Executive Summary
• Main Body
• Appendices

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Main Body of Business Plan

• Introduction
• Should clearly state name of company, nature of
  business, location, operational date and
  prospects of business
• Purpose
• State the key purpose of preparing plan (e.g. for
  financing, business viability assessment,
  operational blueprint etc.)

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Main Body of Business Plan

• Company Background
• details regarding the company legal structure
  (registered name, form address and when
  registered), main activity date operations
  start.
• Owner Background
• Details of each individual that is a registered
  owner of the business
• State relevant qualifications, skills,
  experience, role in business and stake or share
  in business
• Location
• Specify physical location of business premise,
  operations premise (if different), advantage of
  location in helping business achieve objectives
  (e.g. proximity to suppliers, target market or
  usability of space)

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Main Body of Business Plan

• Marketing plan
• Need to highlight target customers, key products
  and services sales forecast
• Operations plan
• Use sales forecast to plan capacity, material,
  equipment and manpower needs
• Organizational plan
• Indicate company structure and key talents
• Financial plan
• Amalgamate budget considerations for marketing,
  operations and organizational needs into project
  cost and sources planning as well as projections
  of cash, profit and asset liability position of
  planned business

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Writing up the Business Plan

• The first step is to have a Business Plan typed
  and edited.
• The second step is to edit the Business Plan.
• As a checklist for a complete business plan,
  entrepreneur may refer to Table 4.12

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Typing Format

• Major Headings
• Font type Arial size 12 or Times New Roman size
  14, bold
• Left justified, mixed case with major words
  capitalized and bold with one line above and one
  line below the heading to separate it from the
  text.
• The Second Heading Level
• Italicized with the major words capitalized.
• The paragraph is indented five spaces, or half
  inch on the left.
• The Third Heading Level
• Indented, italicized and major words capitalized.
• Text in Sections
• Font type Arial size 11 or Times New Roman size
  12
• The first paragraph is not indented.
• Do not space between paragraphs within a section.
  

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Typing Format

• Tables and figures
• Professional in appearance and should not be hand
  drawn.
• Auto fit to the Windows/contents from the Table
  menu of MSWord.
• Should not split into two pages.
• Printing
• A laser quality printer.
• Wide margin, at least one and half inch on the
  left, one inch on the top, bottom and right.
• Double spacing.
• Binding
• A simple comb or spiral binding
• A plastic cover on the front and a thick dark
  colored paper at the back.

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Table 4.12 Business Plan Checklist

• Introduction
• What is the name of the company?
• To whom the business plan is prepared?
• Who are the owners or partners of the company?
• What is the correspondence address?
• Purpose
• Why the business plan is prepared?
• Is the purpose to get financing?
• Who asked for the financing?
• How much financing is needed?
• How the financing is going to be utilized?
• What help this financing will give to the
  company?
• How are we going to pay back the financing?
• Is there any other alternative source of
  financing to ensure the proposed project is
  successful?

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• Company Background
• What is the main product good or services, the
  company is planning to offer?
• What are the main characteristics of the product?
• Is it a new company or an existing company
  planning for expansion?
• What form the business is?
• Why the form is preferable?
• What are the companys strengths and weaknesses?
• How to overcome these weaknesses?
• How the proposed project is profitable?
• The Industry
• Is the industry expanding or contracting?
• What is the outlook of the industry relative to
  the others in the economy?
• Will the company able to get support from the
  suppliers?
• What are the credit terms the suppliers offer?

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Marketing Plan

• Products
• What products the company is planning to offer?
• What is the product concept?
• What are the unique or special characteristics of
  the products?
• Are these products potentially to generate more
  sales?
• Market
• Who are the customers of the company?
• What market segment are these customers in?
• Where is the target market?
• Will customer repurchase the products?
• What is the size of the target market?

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• Competitors
• Who are the competitors?
• Where are the competitors?
• Who are the major competitors?
• What are the strengths and weakness of the major
  competitors?
• What differences and similarities between our
  products and products of the main competitors?
• What strategy is planned to overcome competitors?
• Will it be new competitors in the market?
• How to monitor competitors?
• What is the targeted market share?
• How to penetrate and maintain the targeted market
  share?
• What strategy to increase the market share?
• What strategy to increase the sales?

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• Price
• What price to charge for the products?
• Does company has a price range for the products?
• How company set the price?
• Is the price competitive?
• Why customers willing to pay for the price?
• Promotion
• What promotional strategy to be adopted?
• Why the company plans to adopt the strategy?
• Do we have budget for these promotional
  activities.
• How much is the promotion budged?
• Is the strategy appropriate for our products?
• How are we going to monitor the effectiveness of
  these promotional activities?

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• Place
• How are we going to market our products?
• What is the most appropriate distribution channel
  to be adopted?
• How are we going to deliver the products?
• Does company has any policy regarding on returned
  goods?
• How to maintain good customer relations?

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Organizational Plan

• Does company has any policy regarding on
  recruiting and selecting new staff?
• Who are the key members of the management team?
• Do owners or partners have relevant experiences
  to the proposed project?
• What experiences do owners or partners of the
  company have?
• Who make decisions in the company?
• Who plans for the company?
• What jobs to be done?
• What skills and experiences needed to do these
  jobs effectively?
• Who will do these jobs?
• Who are the key staff needed?
• Are these staffs work full-time or part-time
  basis?
• How much remuneration for the administrative
  staff?
• Do staffs need training?
• What training do they need?
• How much the training will cost?
• How long the training will take?

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Operations Plan

• What are the operations processes involve in the
  manufacturing or producing of our products?
• Does company needs any customized infrastructure
  to facilitate the operations processes?
• What types and number of machineries and
  equipments needed?
• How much is the inventory for raw materials,
  semi-finished and finished goods are?
• How much is the inventory cost?

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Financial Plan

• How much is the project cost?
• How much capital invested by each member or
  partner?
• How much is the total equity compared to the
  total project cost?
• What is the source of financing?
• How we plan to pay back the financing?
• How the forecasted cash flow look?
• Is the proposed project profitable?
• What are the uses and sources of funds of the
  proposed projects?
• How the forecasted financial performances look?
• What do financial performances tell us?

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Conclusion

• Is the proposed project is viable to proceed?
• Have you justified the claims?

Appendix

• Have you attached every supporting facts or
  documents in the appendix?

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END OF MODULE 7