Business Plan (associated with new businesses) Page 1
The Business Plan is a document that outlines what the entrepreneur hopes to achieve from being in business, The
way that the business will achieve its aims and objectives and how various resources will be organized to meet the
goals.
8..Reasons/BENEFITS OF PREPARING A BUSINESS PLAN
1. Ensures careful research is conducted into the feasibility of the business
2. Anticipates needs and problems which can be planned for in advance
3. Provides a written document that can be used when requesting financing/source financing.
4. To attract potential investors
5. To guide the operations of the business when making decisions
9. 5 Elements of a Business Plan
1. EXECUTIVE SUMMARY- a clear overview of the business. It should identify the business’s main objectives,owners,product
and nature of th business and the amount of money you are seeking. It should persuade a potentialinvestor to lend you money.
2..OPERATIONAL PLAN- the business and its objectives eg name, legal structure,address, aims and objectives,
personnel,suppliers, equipment/technology necessary,labour skills and raw materials required,level of production
3. THE BUSINESS OPPORTUNITY-a description of the product or service
4.THE MARKETING PLAN- a description of the potential customers and nature of
competition,pricing,promotion,distribution,ethical issues..
5.. FINANCIAL FORECAST- purpose for which fin ance is required,sources of finance, sales, cash flow, profit and loss forecast,
collateral.
10. 2 majorSources of information for conducting research into the establishment of a business
1. PRIMARY ( Field) RESEARCH- refers to the collection of data that does not already exist. Examples are:
● Surveys using questionnaire
● Personal interview
● Telephone interview
● Postal surveys
● Observation
● Consumer panels
● Test marketing- eg particular region, age group interviewed or survey
1. SECONDARY (desk) RESEARCH- information that already exists in some form because it has already been
collected. Examples are:
● Existing market research
● Sales figures
● Reports from sales/persons regarding feedback from customers
● Annual reports and accounts published by businesses
● Stock exchange reports
● Government publications
● Customer complaints at government agencies
● Information from competitors eg brochures
● Books
● Magazines
● Journals
11. FEASIBILITY STUDY (purpose/worthwhile)
It is an analysis of the viability of a business idea, and an examination of the different aspects of operating a business. It will show whether the
business idea is worthwhile /lucrative business opportunity. If the feasibility study shows that your business is a viable business opportunity then
the BUSINESS PLAN should be prepared.
It comprises similar topics as the business plan.
. Reasons why a feasibility study is important:
1. To ascertain (find out) the viability
2. The possible cost attached to the project
3. Possible source of finance
12. PLANNING- means thinking ahead and preparing the business for future events that could occur.
3 types of Planning:
1. Short-term planning- preparing the business for the next 2 years
2. Medium-term planning- preparing the business for the next 3-10 years
3. Long-term planning- preparing the business for the next 10 years.
A long term plan can be broken down into smaller terms to make the objectives easier to accomplish. Eg. Where do you see yourself
as an individual in the next 10 years? Where are you now in life? What do i need to do to accomplish short term my goals now?
