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THE BUSINESS PLANTHE BUSINESS PLANMEDEC UiTMMEDEC UiTM

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THE BUSINESS PLANTHE BUSINESS PLAN

SESSION OBJECTIVES

At the end of the session, students should be able to:

understand the importance of a business plan, and prepare a business plan

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What Is a Business Plan?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.

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Reasons For Preparing a Business Plan:

1. Opportunity for entrepreneur to assess the business venture objectively, critically and practically.2. To study and evaluate the feasibility of the business.3. To convince venture capitalists, investors and bankers in order to raise capital and obtain support for the venture.4. As a guideline for day-to-day management of the business.5. To be able to distribute business resources more effectively.

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Audiences of the Business Plan:

1. Entrepreneurs2. Investors3. Bankers4. Financial Assistance Providers5. Suppliers6. Customers 7. Employees

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Business Plan Format

1. Cover Letter2. Title Page

* Title of the business plan* Name and address of the business* Name of writers* Date

3. Table of Contents4. Executive Summary5. Main Body of the Business Plan6. Appendices

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Main Body of the Business Plan

1. Introduction2. Purpose3. Background of the Business4. Background of Partners/Shareholders5. Location of Project6. The Organization Plan7. The Marketing Plan8. The Production/Operation Plan9. The Financial Plan10. Justification

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Body of the Business PlanBody of the Business Plan

1. Introduction

a. Name of the businessb. Type of businessc. Industry overviewd. Location of the businesse. Date of commencement f. Factors influencing choice of businessg. Business potential

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Body of the Business PlanBody of the Business Plan2. Purpose

Each business plan is prepared for a specific purpose. The entrepreneur should clearly and specifically state the purpose for preparing the particular business plan .

Examples:a. This business plan is prepared by Syarikat Fair One Sdn. Bhd. to obtain a term loan for the amount of RM50,000 from Bank Pembangunan dan Infrastruktur.

b. This business plan is prepared by Syarikat Fair One Sdn. Bhd. as a guideline in managing the business.

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Body Of The Business PlanBody Of The Business Plan3. Background of the Business

a. Name of the businessb. Business addressc. Correspondence addressd. Telephone numbere. Form of business f. Main activityg. Date of commencement of businessh. Date of business registrationi. Business registration numberj. Name of bankk. Bank account numberl. Equity contribution

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Body Of The Business PlanBody Of The Business Plan

4. Background of Partners/Shareholders

a. Name in fullb. Identity card numberc. Permanent addressd. Correspondence addresse. Telephone number f. Date of birthg. Age

h. Marital statusi. Academic qualificationj. Courses attendedk. Skillsl. Experiencesm. Current job/positionn. Other/Previous

business experiences

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Body Of The Business PlanBody Of The Business Plan

5. Location of project

a. Physical location of project and proximity to roads, highways etc(Provide road map for exact location)

b. Building (type, structure, size and value)c. Infrastructure (water, electricity, telephone)

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Body Of The Business PlanBody Of The Business Plan

6. The Organization Plan

a. General business descriptionb. Organizational chartc. Table of job designation and number of workersd. Job Descriptione. Remuneration tablef. List of office furniture, fixtures and fittingsg. The administrative budget

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Body Of The Business PlanBody Of The Business Plan

7. The Marketing Plan

a. Introduction to the product/servicesb. Target marketc. Market sized. Competitione. Market sharef. Sales forecastg. Marketing strategiesh. The marketing budget

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Body Of The Business PlanBody Of The Business Plan

8. The Production/Operation Plan

a. Process Flow Chartb. Unit output/Hours of operation c. Material requirementd. List of direct workers

* designation* remuneration

e. List of machines and equipmentf. Plant/office layoutg. Locationh. Operation overheadh. The production budget

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Body Of The Business PlanBody Of The Business Plan

9. The Financial Plan

a. Project Implementation Costb. Sources of Financing c. Table of Depreciationd. Loan Amortization Schedulee. Hire Purchase Repayment Schemef. Cash Flow Proformag. Profit and Loss Proformah. Balance Sheet Proforma

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Body Of The Business PlanBody Of The Business Plan

10. Justification

Justify why the project is worthy of finance.