Unit 2: Business Plan

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Lesson 1: Definition, Purpose, and Market Need Identification

Business plan
● a written description of the business that you will establish in the future.
● A business plan can be written before or during the first few years of the enterprise.
● This is to guide the entrepreneur on which strategies would be most beneficial for the
enterprise to take.

KEY TAKEAWAYS
● A business plan is a document describing a company's core business activities and
how it plans to achieve its goals.
● Startup companies use business plans to get off the ground and attract outside
investors.
● A business plan can also be used as an internal guide to keep an executive team
focused on and working toward short- and long-term objectives.
● Businesses may create a lengthier traditional business plan or a shorter lean startup
business plan.
● Good business plans should include an executive summary and sections on
products and services, marketing strategy and analysis, financial planning, and
a budget.

Why prepare a business plan?

1. To test the feasibility of your business idea

2. To give your new business the best chance of success
3. To secure funding
4. To make business planning more effective
5. To attract investors

Three Factors of a Good Business Plan:

1. It’s realistic
2. It’s specific
3. It’s followed through

A realistic business plan accounts for the feasibility of implementation. If the business plan is
not practical or too good to be true, then, no operational method can be devised to achieve
the strategy.
How will you identify the needs of your target market?

A target market is a group of potential customers that you identify to sell products or
services to. Each group can be divided into smaller segments. Segments are typically
grouped by age, location, income and lifestyle. Once you’ve defined your target audience,
you’ll find it easier to determine where and how to market your business.

To define your target market effectively you’ll need to do some research. Gathering
statistics and other market research data helps you to understand your potential customers
and their needs and make better marketing decisions.

● Identifying customer needs is the method of determining what a client needs from
a product.
○ Gather raw data
○ Interpreting data
○ Organizing the data
○ Reflect the process

Kano Technique Qualities

The Kano model is a theory for product development and customer satisfaction
developed in the 1980s by Professor Noriaki Kano, which classifies customer preferences
into five categories.

Must-be Quality
Simply stated, these are the requirements that the customers expect and are taken for
granted. When done well, customers are just neutral, but when done poorly, customers are
very dissatisfied. Kano originally called these “Must-be’s” because they are the requirements
that must be included and are the price of entry into a market.
Examples: In a hotel, providing a clean room is a basic necessity. In a call center, greeting
customers is a basic necessity.
One-dimensional Quality
These attributes result in satisfaction when fulfilled and dissatisfaction when not fulfilled.
These are attributes that are spoken and the ones in which companies compete. An example
of this would be a milk package that is said to have ten percent more milk for the same price
will result in customer satisfaction, but if it only contains six percent then the customer will
feel misled and it will lead to dissatisfaction.
Examples: Time taken to resolve a customer's issue in a call center. Waiting service at a
hotel.
Attractive Quality
These attributes provide satisfaction when achieved fully, but do not cause dissatisfaction
when not fulfilled. These are attributes that are not normally expected, for example, a
thermometer on a package of milk showing the temperature of the milk. Since these types of
attributes of quality unexpectedly delight customers, they are often unspoken.
 Examples: In a callcenter, providing special offers and compensations to customers or the
proactive escalation and instant resolution of their issue is an attractive feature. In a hotel,
providing free food is an attractive feature.

Indifferent Quality
These attributes refer to aspects that are neither good nor bad, and they do not result in
either customer satisfaction or customer dissatisfaction. For example, thickness of the wax
coating on a milk carton. This might be key to the design and manufacturing of the carton, but
consumers are not even aware of the distinction. It is interesting to identify these attributes in
the product in order to suppress them and therefore diminish production costs.
Examples: In a callcenter, highly polite speaking and very prompt responses might not be
necessary to satisfy customers and might not be appreciated by them. The same applies to
hotels.
Reverse Quality
These attributes refer to a high degree of achievement resulting in dissatisfaction and to the
fact that not all customers are alike. For example, some customers prefer high-tech products,
while others prefer the basic model of a product and will be dissatisfied if a product has too
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many extra features.

Examples: In a callcenter, using a lot of jargon, using excessive pleasantries, or using

excessive scripts while talking to customers might be off-putting for them. In a hotel,
producing elaborate photographs of the facilities that set high expectations which are then
not satisfied upon visiting can dissatisfy the customers.

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Lesson 2: The Business Plan Contents (I): Introduction, Executive Summary, and
Proponents

● Business Plan Introduction

○ provides a general, high-level view that describes a business's primary goals
and purpose. Since this is the first item that readers and investors use to
learn about your business idea, it's important to give considerable thought
and attention to this section.
○ https://www.indeed.com/career-advice/career-development/business-plan-intr
oduction-example for PT
What is the difference between the business concept and business model?
● BUSINESS MODEL
○ Business model is important because it provides the investors the knowledge
about the competitive edge of the company and provides better insight into
working of the company. A strong business model leads to cash generation
and future expansion.
○ A business model is a formula on how the business plans to make money out
oF business.
 ● the business model is the foundation of a company, while the business plan is the
structure. So, a business model is the main idea of the business together with the
description of how it is working.
● The business plan goes into detail to show how this idea could work. A business
model can also be considered the mechanism that a company has in order to
generate profits. At the same time, the business plan also does its part being the way
a company can present its strategy.It is also used to show the financial performance
that is expected for the near future.

● BUSINESS CONCEPT
○ A business concept is a statement that describes the reach and reason of
existence of a given business idea. In other words, it sums up the crucial
elements that define the business.
○ A business concept should have the essence of the business in a short but
powerful manner.
Four Areas of Business Modelling:
1. Raising revenue
2. The cost of the enterprise products and other costs of doing business
3. Major investments of the enterprise
4. Financing the investment

● Business goals
○ show the long-term and future prospects of the enterprise.
○ It is composed of the vision, mission, objectives, key results area, and
performance indicators.

REMEMBER:
● Goals tell you wherever you want to go; objectives tell you precisely the way to get
there.
● Goals tell you wherever you want to go; objectives tell you precisely the way to get
there.

● Executive Summary- The executive summary summarizes the necessary details of

the business plan for its readers. It is timesaving for readers, for they are able to get
the gist of the business plan.
Contents:
For Startup Business:
● The business opportunity
 ● Taking advantage of the opportunity
● The target market
● Business model
● Marketing and sales strategy
● The competition
● Financial analysis
● Owners/Staff
● Implementation plan
Things to keep in mind when writing an executive summary:
1. Focus on providing a summary.
2. Keep your language sturdy and positive.
3. Keep it short.
4. Polish your executive summary.
5. Put yourself in your readers’ place.

Who are considered to be the business proponents in a certain business?

proponent - a person who advocates a theory, proposal, or project.

Types of Stakeholders
● Resource Mobilizers
● Technology Providers and Applicator
● Government and Top Management
● Operations and Support Team