Building a business plan

Question 1

Business Plan

Answer 1

According to Hisrich, Manimala, Peters, & Shepherd (2015) business plan is a written document prepared by entrepreneur that describes all the relevant external and internal elements involved in starting a new venture.

It integrates the functional plans such as marketing, finance, manufacturing, and human resources.

The business plan is the entrepreneur’s roadmap for a successful enterprise.

Question 2

Importance of business plan (BP)

Answer 2

a. BP is required by lenders or investors if you require external funding
b. BP is a guide to business operations
c.BP is a guide to business operations
d. It helps to determine the viability of the venture.
It serves as a document for reference and guidance to the entrepreneur for carrying out activities as per plan.

It serves as an important tool in obtaining finance.

Question 3

Who Should Write the Plan?

Answer 3

The person or persons responsible for implementing the plan should be heavily involved in its development

Question 4

Audience of Business Plan

Answer 4

The business plan will be read and used by several stakeholders for different reasons. Some of the audiences are:
Investors
Bankers
Potential Partners
Customers
Suppliers
Managers and Employees

Question 5

How Long Should a Business Plan Be?

Answer 5

Will depend on the audience for your plan
If you want to seek for equity capital from a potential investor, then the plan should be comprehensive and detailed
Thoughtfully and thoroughly considering all the areas of the plan is much more important

Question 6

Components of Business plan

Answer 6

1. business profile-Name and address of business
   Name and address of principal(s)
   Nature of business
   Vision, Mission, and Objectives
   Statement of financing needed
2. executive summary
3. marketing plan-
   Description of product(s)
   Target market segments
   Target market area
   Demand analysis
   Supply analysis
   Gap analysis
4. production and technical plan-Production facility location and description
   Fixed asset requirements and cost
   Methods/Processes involved
   Sources and terms of acquisition of fixed assets
   Raw material requirements and cost of material requirements
   Total production cost of production.
   Production schedule
5. Organizational and management plan- Business name and logo
   Organizational structure
   Description of key positions and responsibilities
   Recruitment, selection and training of staff - Recruitment strategy - Selection strategy - Training strategy
   Cost of personnel for administration
   Organization and management expenses
6. financial plan- Financing plan
   Loan repayment and interest
   Projected cash flow statement
   Projected profit and loss statement
   Projected balance sheet
   Break–even analysis
   Financial/investment analysis