GEE 102 Lesson 3 - Preparing A Business Plan
GEE 102 Lesson 3 - Preparing A Business Plan
GEE 102 Lesson 3 - Preparing A Business Plan
OVERVIEW
What is a Business Plan?
The business plan is a written document prepared by the entrepreneur that describes all the
relevant external and internal elements involved in starting a new venture. It is often an integration of
functional plans such as marketing, finance, manufacturing, and human resources.
Executive Summary
This section of the business plan is prepared after the total plan is written. About two to three
pages in length, the executive summary should stimulate the interest of the potential investor.
Executive summary should answer the questions:
What is the business concept or model?
How is this business concept or model unique?
Who are the individuals starting this business?
How they will make money and how much?
Description of Venture
The description of venture should be detailed in this section of the business plan. This will
enable the investor to ascertain the size and scope of the business.
Describing the venture:
What is the mission of the new venture?
Why will you be successful in this venture?
What is your product(s) and/or service(s)?
Where will the business be located?
Why is this building and location right for your business?
Production Plan
If the new venture is a manufacturing operation, a production plan is necessary. This plan
should describe the complete manufacturing process.
Production Plan should describe the:
physical plant layout;
machinery and equipment needed to perform the manufacturing operations;
raw materials and suppliers’ names, addresses, and terms;
costs of manufacturing; and
any future capital equipment needs.
Operations Plan
This section goes beyond the manufacturing process (when the new venture involved
manufacturing) and describes the flow of goods and services from production to the customer. A non-
manufacturer such as a retailer or service provider would also need this section in the business plan to
explain the chronological steps in completing a business transaction.
It might include:
inventory or storage of manufactured products;
shipping;
inventory control procedures; and
customer support services.
Marketing Plan
The marketing plan is an important part of the business plan since it describes how the
product(s) and/or service(s) will be distributed, priced, and promoted. Marketing research evidence to
support any of the critical marketing decision strategies as well as for forecasting sales should be
described in this section. Specific forecasts for a product(s) and/or service(s) are indicated to project
profitability of the venture.
Organizational Plan
The organizational plan is the part of the business plan that describes the venture’s form of
ownership, that is, proprietorship, partnership, or corporation. If the venture is a partnership, the terms
of the partnership should be included. If the venture is a corporation, it is important to deal the shares
of stock authorized and share options, as well as the names, addresses, and resumes of the directors
and officers of the corporation.
Assessment of Risk
Every new venture will be faced with some potential hazards, given its particular industry and
competitive environment. It is important that the entrepreneur make an assessment of risk in the
following manner. The entrepreneur should:
indicate potential risks to the new venture;
be a discussion of what might happen if these risks become reality; and
discuss the strategy that will be employed to prevent, minimize, or respond to the risks
should they occur.
Financial Plan
It determines the potential investment commitment needed for the new venture and indicates
whether the business plan is economically feasible. Financial planning is the process of estimating the
capital required and determining its competition. It is the process of framing financial policies in relation
to procurement, investment and administration of funds of an enterprise.
Appendix
The appendix of the business plan generally contains any backup material that is not necessary
in the text of the document. Reference to any of the documents in the appendix should be made in the
plan itself.
LET’S CONNECT
______ 1. When you are planning of putting up a business you have to consider its location.
______ 2. The kind of machines and equipment you need to acquire will not depend on the level of
technology used in operations.
______ 3. Wrong decisions may not result to the loss of the enterprise.
______ 4. Do not buy equipment from reliable supplier.
______ 5. It is not necessary to train a newly hired employee.
______ 6. Outputs includes materials, manpower, machinery money and the like.
______ 7. If you do not plan and schedule your production properly, you will waste and loss
production cost.
______ 8. The formula for productivity is equals to input over output.
______ 9. Raw materials should be available anytime for production.
______ 10. Before operating the business, entrepreneur must complied with government regulations
and policies.
ACTIVITY 2 ESSAY
Directions: In not less than 100 words, write a short essay based on what is being asked.
This task is worth 10 points.
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