Business Plan

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Presented by:

Rizwan Qamar

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Outline

• Business Plan• Types of Plan• Advantages of Plan• Business Planning Process• Supply Chain• Marketing Research• Environmental Scanning• Product Management

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Outline (Cont’d)

• Pricing

• Promotion and Distribution

• Channel Management

• Financial Plan

• Brake Even Analysis

• Limitations

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Business Plan

• Set of guide line for the new venture

• Define each and every aspect of business

• Identifies Product or service and Market

• Serves as the Firms Resume

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Types of Business Plans

• The Miniplan

• The Working Plan

• The Presentation Plan

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The Miniplan

• Also Called SUMMARY Plan

• Consists on 1-10 pages

• Include only Key Matters

• Suitable for Internal Concerns

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The Working Plan

• A tool to be used to operate the business

• Longer in detail and shorter in Presentation

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The Presentation Plan

• More attention is paid to attractive formatting

• Formal language, and conciseness

• Suitable for showing to bankers, investors and others outside the company

• More Expensive

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Advantages of Business Plan

• Focusing time and energy • Puts a solid strategy in place to set your

business apart from the competition • Ability to communicate the plan to

employees • Held them accountable for results • Results of business efforts can be tracked

and mid-course corrections made to get back on track if necessary

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Business Planning Process

• Idea Generation

• Feasibility Analysis

• Drawing up a Functional Plan

• Project Report Preparation

• Evaluation, Control & Review

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Contents of a Business Plan

• Executive summary

• Background

• Background of key personnel

• Marketing

• Production and manufacturing

• Finance

• Human resources

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Supply Chain

• Logistics network, or supply network

• Coordinated system of organizations, people, activities, information

• Moving a product or service in physical or virtual manner from supplier to customer

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Key Process of Supply Chain

• Customer relationship management • Customer service management • Demand management • Order fulfillment • Manufacturing flow management • Supplier relationship management • Product development and commercialization • Returns management / reverse logistics

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Marketing Research

• Business-to-Business (B2B) Marketing Research

• Consumer Marketing Research

• Advertising Research

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Marketing Research Techniques

• Test marketing • Concept testing • Mystery shopping • Store audit • Demand estimation • Sales forecasting • Customer satisfaction studies • Distribution channel audits

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Marketing Research Techniques (Cont’d)

• Price elasticity testing

• Segmentation research

• Consumer decision process research

• Positioning research

• Brand name testing

• Brand equity research

• Advertising and promotion research

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Marketing Research Techniques (Cont’d)

• Internet Strategic Intelligence

• Marketing Effectiveness and analytics

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Marketing Research Methods

• A-BASED ON QUESTIONING

• B-BASED ON OBSERVATIONS

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A-based on questioning

• Qualitative marketing research-generally used for exploratory purposes

-small number of respondents

-not generalizable to the whole population

-statistical significance and confidence not

calculated -examples include focus groups, in-depth

interviews, and projective techniques

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A-based on questioning (Cont’d)

• Qualitative marketing research-generally used to draw conclusions

-tests a specific hypothesis

-the uses random sampling techniques so as to infer from sample to the population

-involves a large number of respondents

-examples include surveys and questionnaires

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B-based on observations

• Ethnographic studies – by nature qualitative – researcher observes social phenomena in

their natural setting – observations can occur cross-sectionally

(observations made at one time) or longitudinally (observations occur over several time-periods)

– examples include product-use analysis and computer cookie traces

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B-based on observations (Cont’d)

• Experimental techniques – by nature quantitative – the researcher creates a quasi-artificial

environment to try to control spurious factors – then manipulates at least one of the variables – examples include purchase laboratories and

test markets

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The Macroenvironment

• The Economy – GNP or GDP per capita – Economic growth – Unemployment rate – Inflation rate – Consumer and investor confidence – Inventory levels – Currency exchange rates – Merchandise trade balance – Financial and political health of trading partners – Balance of payments – Future trends

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The Macroenvironment (Cont’d)

• Government – Political climate - amount of government activity – Political stability and risk – Government debt – Budget deficit or surplus – Corporate and personal tax rates – Payroll taxes – Import tariffs and quotas – Export restrictions – Restrictions on international financial flows

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The Macroenvironment (Cont’d)

• Legal – Minimum wage laws – Environmental protection laws – Worker safety laws – Union laws – Copyright and patent laws – Anti- monopoly laws – Sunday closing laws – Municipal licenses – Laws that favor business investment

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The Macroenvironment (Cont’d)

• Technology – Industrial productivity – New manufacturing processes – New products and services of competitors – New products and services of supply chain

partners – Any new technology that could impact the

company – Cost and accessibility of electrical power

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The Macroenvironment (Cont’d)

• Ecology – Ecological concerns that affect the firms

production processes – Ecological concerns that affect customers'

buying habits – Ecological concerns that affect customers'

perception of the company or product

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The Macroenvironment (Cont’d)

• Socio-Cultural – Demographic factors such as: – Population size and distribution – Age distribution – Education levels – Income levels – Ethnic origins – Religious affiliations

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The Macroenvironment (Cont’d)

• Attitudes towards – Materialism, capitalism, free enterprise – Individualism, role of family, role of government,

collectivism – Role of church and religion – Consumerism – Environmentalism – Importance of work, pride of accomplishment

• Cultural structures including – Diet and nutrition – Housing conditions

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The Macroenvironment (Cont’d)

• Potential Suppliers – Labor supply – Quantity of labor available – Quality of labor available – Stability of labor supply – Wage expectations – Employee turn-over rate – Strikes and labor relations – Educational facilities

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The Macroenvironment (Cont’d)

• Material suppliers – Quality, quantity, price, and stability of material inputs – Delivery delays – Proximity of bulky or heavy material inputs – Level of competition among suppliers

• Service Providers – Quantity, quality, price, and stability of service

facilitators – Special requirements

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New Product Development

• Idea Generation

• Idea Screening

• Concept Development and Testing

• Business Analysis

• Beta Testing and Market Testing

• Technical Implementation

• Commercialization

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Product Management

• Product planning

• Product marketing

• Program management

• Project management

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Pricing

• Achieve the financial goals of the firm• Fit the realities of the marketplace (will customers buy at

that price?) • Support a product's positioning and be consistent with

the other variables in the marketing mix • Price is influenced by the type of distribution channel

used, the type of promotions used, and the quality of the product

• Price will usually need to be relatively high if manufacturing is expensive, distribution is exclusive, and the product is supported by extensive advertising and promotional campaigns

• A low price can be a viable substitute for product quality, effective promotions, or an energetic selling effort by distributors

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Pricing Types

• Effective price

• Price lining

• Promotional pricing

• Price/quality relationship

• Premium pricing

• Goldilocks pricing

• Demand-based pricing

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Promotion

• Personal selling • Non-personal selling • Advertising • Sales promotion • Publicity and public relations • Tradeshows • Direct selling • Product placement

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Distribution

• Should the product be sold through a retailer? • Should the product be distributed through wholesale? • Should multi-level marketing channels be used? • How long should the channel be (how many members)? • Where should the product or service be available? • When should the product or service be available? • Should distribution be exclusive, selective or extensive? Who should control the channel (referred to as the

channel captain)? • Should channel relationships be informal or contractual? • Should channel members share advertising (referred to

as co-op ads)?

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The distribution channel

• Selling direct, such as via mail order, Internet and telephone sales

• Agent, who typically sells direct on behalf of the producer

• Distributor (also called wholesaler), who sells to retailers

• Retailer (also called dealer), who sells to end customers

• Advertisement typically used for consumption goods

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Financial plan

• Personal financial plan– Personal budget – Personal investment plan – Financing plan

• Business financial plan– Financial statements – Projection of income and expenses – Financing plan

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Break Even Analysis

• Cost=Revenue• Cost• Variable Cost• Fixed Cost• Revenue• Profit• Profit Margin• Profit Equation• Change in Price and BE

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Limitations of BE

• Break-even analysis is only a supply side • It assumes that fixed costs (FC) are constant • It assumes average variable costs are constant

per unit of output, at least in the range of likely quantities of sales

• It assumes that the quantity of goods produced is equal to the quantity of goods sold

• In multi-product companies, it assumes that the relative proportions of each product sold and produced are constant

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Human Resource Management

• It is a Process of acquiring, training, appraising and compensating employees and attending to their labor relations, health and safety and fairness concerns.

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HRM Activities

• Requirement and Selection

• Training and development

• Performance Appraisals

• Compensation

• Incentives and Benefits

• Equal Employment Opportunities and Affirmative Action

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HRM Activities (Cont’d)

• Motivating Employees

• Health and Safety Issues

• Legal Requirements of Workers

• Building Employment Commitment

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Recruitment and Selection

• Job Analysis

• Job Posting

• Recruitment

• Test Conducting

• Background Investigation

• Interviews

• Selection Decision

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Training and Development

• Need Analysis

• Instructional Design

• Validation

• Implementation

• Evaluation

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Training Techniques

• On the Job Training

• Off the Job Training

• Computer Based Training

• Lectures

• Programmed Training

• Audio/Video Visuals based Training

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Performance Appraisals

• Define Job Means

• Appraising Performance

• Feedback Session

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Compensation and Benefits

• Basic Pay

• Pay on Merit

• Pay for work done

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Incentives and Benefits

• Bonuses

• Commissions

• Medical Allowance

• House Rent Allowance

• Conveyance Allowance

• Children Education Allowance

• Free Utilities

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Incentives and Benefits (Cont’d)

• Pension and Gratuity

• Vacations/Holidays

• Sick Leave

• Insurance Benefits

• Social Security

• Family Friendly Benefits

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Acts and Laws In Pakistan

• Industrial Relations Ordinance 2002• Factory Act 1934• Industrial and Commercial Employment

Ordinance 1968• Payment of wages Act 1936• Workmen’s Compensation Act 1923• Provincial Employees Social Security

Ordinance 1965

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Recommendations

• The Business Plan should be concise and full of relevant information about concerning product or service.

• The Business plan should be revised and error free.

• The strategies should be well defined and the tools to achieve them

• The whole Hierarchy of an organization and their concerned work should be clearly defined

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Recommendations (Cont’d)

• In Business plan the Financial position of the company (current) and the Desired targets (Future) in terms of profit or return should be well defined.

• Business Plan should be result and Goal Oriented.

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Conclusion

• We conclude that the Business plan is having a greater importance for a company who desire to enter in Business world.

• The strategies are based on it. It means the whole business and its progress depends on how well the Business plan of the company is being made and clarified.

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Thanks