FUNDAMENTALS OF ENTREPRENEURSHIP

(ETR300/ENT300)

MODULE 7 :
BUSINESS PLAN

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 7 : Business Plan 1

 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

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 7 : Business Plan 2

 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.

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 7 : Business Plan 3

 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.

As a guideline for day-to-day management of the

business.
To be able to distribute business resources more
effectively.
Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 7 : Business Plan 4
 READERS OF THE BUSINESS PLAN:

1. Entrepreneurs
2. Investors
3. Bankers
4. Financial Assistance Providers
5. Suppliers
6. Customers
7. Employees

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 7 : Business Plan 5

 FORMAT OVERVIEW

Cover Letter Introduction

Purpose of business plan

Cover Page
Company background

Table of Contents Owner(s) background

Business location
Executive Summary
Marketing plan

Main Body Operations plan

Organizational plan
Appendices
Financial plan

Conclusion or summary

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 7 : Business Plan 6

 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.)

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 7 : Business Plan 7

 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)

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 7 : Business Plan 8

 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
Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 7 : Business Plan 9
 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

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 7 : Business Plan 10

 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.

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 7 : Business Plan 11

 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.

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 7 : Business Plan 12

 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?

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 7 : Business Plan 13

 Table 4.12 BUSINESS PLAN CHECKLIST
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?
Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 7 : Business Plan 14
 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?

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 7 : Business Plan 15

 MARKETING PLAN
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?

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 7 : Business Plan 16

 MARKETING PLAN

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?

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 7 : Business Plan 17

 MARKETING PLAN
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?

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 7 : Business Plan 18

 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?

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 7 : Business Plan 19

 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?

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 7 : Business Plan 20

 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?

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 7 : Business Plan 21

 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?

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 7 : Business Plan 22

END OF MODULE 7