Preparing a Business Plan

Business Plan (BP)
is a written document which thoroughly explains a business or project to be executed
is the business master plan that explains on the studies undertaken and on the measures to be taken in the future to develop the business; projections and forecast as well as a plan of implementation for the business strategy.

Application

To enable entrepreneurs to study and evaluate a project in an objective, critical and practical manner
1. To serve as a guideline for management of the business
2. To study and evaluate whether the project to be executed is profitable or otherwise.
3. To convince relevant parties on the business ideas and to serve as basis for funding proposals
4. To distribute the limited sources with equal and fairness.

Gathering of Supporting Information

1. Records and internal data of a business
2. Statistics
3. Economic data
4. Trade data
5. Market research

Content

1. Table of content
2. Executive summary/synopsis
3. Introduction
4. Purpose of BP
5. Business/company background
6. Background of proprietor
7. Organisation/management plan
8. Marketing plan
9. Production/operation planning
10. Financial planning
11. Project implementation schedule
12. Conclusion

Preparation
1. Introduction

Name of company
Type of business proposed
Products/services offered
Premise location
Date of launching of business
Industry background and market trends
Future scenario

2. Purpose of BP preparation
Explain whether you wish to:

Apply for financing from any institution
Planning for a new project
Use as a guideline in managing the business
Use it for other purposes.

3. Company/business background

Company name
Address, contact numbers
Type of business
Main activities
Starting date for the business
Business registration number
Start-up capital, authorised capital
Names and addresses of shareholders
Name of bank (if any)
Company account number (if any)

4. Proprietor/partners/shareholder background

Names, addresses, contact telephone numbers
Academic qualification
Experiences/Expertise

5. Organisation/management planning

Objectives and strategy of company
Structure/company chart
Management team
List of staff
Accountabilities of each staff
Remunerations of each staff

6. Marketing strategy

Market analysis

Draw up an effective sales forecast, conduct an analysis on customers, the market and products/services
Study the market direction and trends of the industry in which the business is taking place
Quantify the market size, which is the total market potential in a given area within certain period of time. (e.g. one year)
Products/services – characteristics as well as features and benefits

Identify customer/consumer of the products or services
Identify the competition for the product/services
Sales projection
Market share for the product/services.
Marketing strategy
The overall marketing strategy
How the company will handle the competition
The business edges among the competitors in terms of quality, price, location, image and so on
Product strategy
Customers attraction factors
Pricing strategy
Pricing factors
Discounts, special offers etc
Distribution strategy
Distribution methods
Costs involved
Short- and long-term plans of the sales
Promotional strategy
Promotional techniques adopted
Marketing budget

7. Production/operations plan

Products/services offered including the quantity
Production process (if manufacturing field)
Production capacity
Manufacturing Plan
Amount of production
Maximum capacity
Stock inventory
List of raw material (if any)
List of labour/workers involved in production/services
Machine handling/equipment

8. Financial Planning

This section is to justify the projections and suppositions made with regards to market, sales, and costs involved. Projections/suppositions made should be realistic so that they can be used for evaluation on the viability of project and also as a tool for budget control.

This section includes :

Project Costing
Source of funding
Own capital
Bank loan
Hire purchase
Others
Pro forma cash flow – monthly and yearly (3-5 years
Pro forma income statement – yearly (3-5 years)
Break-even-point analysis

9. Project implementation schedule

Indicate the phases of implementation of the project.

10. Conclusion/justification
Provide a valid reason to convince certain parties regarding the viability/profitability of the project / business.


Note:

Reference:
Pusat Pembangunan Usahawan Malaysia (MeCD). ‘Asas Keusahawanan'

Young, Arthur. 'Outline for a Business Plan