ENTREPRENEURS

HIP

REPORT ON

DEVELOPING A BUSINESS PLAN

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Definition of a business Idea
A business idea is a concept that can be used for financial gain that is usually
centered on a product or service that can be offered for money. An idea is the
first milestone in the process of building a successful business.

Developing 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.
If you jot down a paragraph on the back of an envelope describing your business
strategy, you've written a plan, or at least the germ of a plan.

Business plans can help perform a number of tasks for those who write and read
them. They're used by investment-seeking entrepreneurs to convey their vision
to potential investors. They may also be used by firms that are trying to attract
key employees, prospect for new business, deal with suppliers or simply to
understand how to manage their companies better.

Components of a business plan

Executive Summary:

A persuasive summary that will entice a reader to take the plan seriously and
read on. Includes information on the companys history, objectives, services,
market, strategies, management, and funding.

Company Summary:

Company summaries should discuss in detail the businesss ownership and legal
status.

Also includes information on the companys start-up.

Products or Services:

It is important to discuss the competitive advantage a business product or

service has over the competition .

They should answer why there is a need for the product or service. What makes
your product or service unique?

Can you price the product or service competitively and still maintain a healthy
profit margin?

Marketing Analysis

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Provides an analysis of who your customers are, their purchasing habits, their
buying cycle, etc.

Investors look for management teams with a thorough knowledge of their target
market.

Strategy and Implementation:

What resources and processes are necessary to get the product to market? This
section should describe the manufacturing, R&D, purchasing, staffing, equipment
and facilities required for your business.

Management Summary:

Investors must feel confident that the management team knows its market,
product and has the ability to implement the plan.

Therefore, a plan must communicate management's capabilities in obtaining the

objectives outlined in the plan.

Financial Plan:

At the heart of any business operation is the accounting system.

One of the first steps to having a profitable business is to establish a

bookkeeping system which provides data in the following four areas:

1. Balance Sheet
2. Break-Even Analysis
3. Profit and Loss Statement
4. Cash Flow
If the goal of your business plan is to obtain financing, a company must generate
a financial forecast for 3-5 years.

Business Plan Process

Idea Generation:
It is the first step in the business Planning process. This step differentiates
entrepreneur from usual business. An entrepreneur may come up with new
business idea or may bring in value addition to existing product in the market.
Sources of new idea for entrepreneurs are:

Consumers /Customers
Existing companies
Research and development
Employees
Dealers, Retailers

Environmental Scanning:

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Once the entrepreneur is through with the idea stage, next entrepreneur is
required to conduct environmental scanning which includes analyzing external
and internal environment that affects business idea.

Types:

External Environment
Internal Environment

Feasibility Analysis:

It refers to conducting detailed analysis in relation to every aspect relevant to

business and determining credibility of business.

Types:

Market Analysis: It is conducted to estimate the demand and market share

for proposed product and service in future. Demand and market analysis
is based on factors like consumption pattern, availability of substitute
goods and services etc.
Technical and operational analysis: It is to assess operational ability of
proposed business enterprise. Technical and operational analysis collects
data on following parameters:
- Material Availability
- Material Requirement
- Plant Location and Plant Capacity
- Machinery and Equipment

Marketing plan: It lays down the strategies of marketing which can lead to
success of business plan. Strategies are in terms of marketing mix which
includes (Product, price, place, promotion) which determines the potential
demand of the customers for product in the market.
Production plan: Production plan is drafted for manufacturing sector
whereas operation plan is designed for business in service sector. It
comprises of strategies on parameters such as location layout, cost,
availability of material, human resources.
Organization plan: It defines type of ownership pattern in company , sole
trading concern, family business, private or public limited company etc.
Financial plan: financial plan indicates the requirement of proposed
business enterprise. Which includes fund flow, cash flow statement, break
even point, projected ratio, projected balance sheet.

Project report preparation: Project report is a written document that

describes step by step strategies involved in starting and running business.

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Evaluation, Control, Review: As company operates in dynamic environment
company has to monitor and review strategies and policies to stay in line with
competition existing in market.

Guidelines & Procedures for Starting a New Business in

India
Once you have decided to start a business, an important consideration to look
into is the various government guidelines for setting up a factory, seeking
permits from various departments (including electricity, water, environment,
etc) and filing registrations along with necessary fee, necessary taxation, etc.

Startup Checklist

Obtain PAN Number from Income Tax Dept

Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in

the form of a laminated card, by the Income Tax Department.

Open a Current Account

Open a current account with a Bank.

Register For Service Tax

Service tax is, as the name suggests, a tax on Services. It is a tax levied on the
transaction of certain services specified by the Central Government under the
Finance Act, 1994.

It is an indirect tax (akin to Excise Duty or Sales Tax) which means that normally,
the service provider pays the tax and recovers the amount from the recipient of
taxable service.

Register for VAT / Sales Tax

VAT is a multi-point destination based system of taxation, with tax being levied
on value addition at each stage of transaction in the production/ distribution
chain.

The State Governments, through Taxation Departments, are carrying out the
responsibility of levying and collecting VAT in the respective States. While, the
Central Government is playing the role of a facilitator for the successful
implementation of VAT.

Shop & Establishment Act

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Shop and Establishment Act is to provide statutory obligation and rights to
employees and employers in the unorganised sector of employment, i.e., shops
and establishments. A state legislation; each state has framed its own rules for
the Act.

File Entrepreneurship Memorandum at DIC (Optional)

Although not mandatory, you may File Part I of Entrepreneurs Memorandum to
the District Industries Centre. This may be necessary for claiming certain
incentives / subsidies and for certain formalities at the state level.

Apply for TAN

All those persons who are required to deduct tax at source or collect tax at
source on behalf of Income Tax Department are required to apply for and obtain
TAN.

Employee's Provident Fund

Applicable for establishments employing 20 or more persons and engaged in

industry notified under Section 6 of Act.

Employees State Insurance (ESI) Scheme

The Act is applicable to non-seasonal factories employing 10 or more persons.

The Scheme has been extended to shops, hotels, restaurants, cinemas including
preview theatres, road-motor transport undertakings and newspaper
establishments employing 20* or more persons.

States Initiative

Single Window clearance for following licenses

MIDC SERVICES
Land Department- Services

Extension of Time Limit for Application for grant of Extension of Time

obtaining BCC Limit for obtaining BCC [Annexure-7]
Application for Predetermined
Execution of Predetermined Lease
Lease[Annexure-5]
Application form for Final Lease[Annexure-
Execution of Final Lease
6]
Application for Grant of Permission for
Permission for Mortgage
Mortgage Consent [Annexure-14]
Application form for Grant of Permission for
Grant of Permission for Leasing
Leasing
Permission for Application for Grant of Permission for

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Amalgamation/Waival of Marginal Amalgamation /Waival of Marginal Distance
Distance [Annexure-9]
Application for Grant of Permission of Sub
Permission of Sub Division of Plot
Division of Plot [Annexure-10]
Application for Grant of Permission for
Permissoin for Change in Activity
Change in Activity [Annexure-11]
Application for Grant of Permission for
Permission for Change in Land use
Change in Land Use [Annexure-12]
Application for Grant of Permission for
Surrender of Plot & Refund
Surrender of Plot & Refund [Annexure-15]
Application form for sub-letting Application form for sub-letting
Application form for change in Application form for change in name of
name of company company
Application form for sub-leasing Application form for sub-leasing
Application form for Transfer Application form for Transfer
Application form for Property Card / Sample
Property Card
Property Card
Online Land Application Online Land Application

Application for Provisional Fire Approval For Revised Building Plan

Application for Provisional Fire Approval For Revised Building Plan
Final Fire Approval
Application for Final Fire Approval [Annexure-25]
Renewal of Final NOC
Renewal of Final No-Objection Certificate
Engineering - Water Department-
Services

Application for Grant of MIDC's Water

Water Supply Connection
Supply Connection [Annexure-18]
Application for No Dues Certificate
No Dues Certificate
[Annexure-21]

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Bibliography

https://www.entrepreneur.com/article/38290
http://www.investopedia.com
https://en.wikipedia.org/wiki/Business_idea
https://en.wikipedia.org/wiki/Business_idea
http://www.thefundingroom.co.uk/how-to-define-your-business-idea-in-
words
http://smallb.sidbi.in/