types of business plan

Module 4: PLANNING A BUSINESSLESSON 2

TYPES OF BUSINESS PLANMr. CARLO JUSTINO J. LUNAAngeles City National Trade School

WHAT IS THE LESSON ABOUT?This lesson deals with the

different types of business plan.

At the end of the lesson, you should be able to:a. enumerate the components of a

business plan; andb. determine and describe the

different types of business plan

WHAT WILL YOU LEARN?

A business plan is a formal statement of business goals, reasons they are attainable, and plans for reaching them.

It may also contain background information about the organization or team attempting to reach those goals.

BUSINESS PLAN

C

WORDS TO STUDY

O M P O N E N T

is a constituent part of the business plan

F

WORDS TO STUDY

E A S I B I L I T Y

S T U D Y

is an analysis and evaluation of a proposed project to determine its

profitability

M

WORDS TO STUDY

A R K E T I N G

deals with the selling and buying activities of the business

P

WORDS TO STUDY

R O J E C T

deals with the introduction statement of the problem

S U M M A R Y

After having learned about the IMPORTANCE of

business planning, you must KNOW THE

DIFFERENT TYPES of business plan.

1. Feasibility Study2. Concept Paper3. Business Plan 4. Project Proposal

TYPES

FEASIBILITY STUDY

It is created in order to minimize risk and to ascertain the viability of a project.

It is not merely an investigation but a frame work on how the operation of a business project shall be accomplished.

It is used to determine the potential success of a proposed business venture

FEASIBILITY STUDY

FEASIBILITY STUDYWill it work? When?

Why?Where?

How long?

How much?

A feasibility study has a PROJECT SUMMARY which deals with the:

1. Introductory statement of the problem

2. Business name3. Business logo4. Business location5. Descriptive definition of the

problem6. Objectives

A feasibility study contains five major components, namely:a) Marketing studyb) Technical studyc) Management studyd) Financial studye) Social desirability

COMPONENTS OF FEASIBILITY STUDY

a. MARKETING STUDYThe sufficient demands for the product as well as the competitive position of the firm in the industry must be determined.


b. TECHNICAL STUDYIn this study, you must consider the manufacturing process, plant size, production schedule, machinery, plant location and layout structure,raw materials, utilities andwaste disposal.


c. MANAGEMENT STUDYThis involves on how the project shall be managed such as the business organization including the organization chart and function of each unitmanagement personnel,skills and numbers oflabor required.


d. FINANCIAL STUDYYou should include the assessment of total capital requirements break-even outputs, sales and prices, amount of sales required to earn acertain amount of profit andthe cash payback period.


e. SOCIAL DESIRABILITYThis is measured by economic benefits to the people living in the community and its vicinities.


CONCEPT PAPER

It is a written plan for a business on how it will be managed.

It is a tool to represent a certain venture anticipating its future.

CONCEPT PAPER

The different parts of the concept paper are the following:a) Introductionb) Objectivesc) Rationaled) Terms and conditionse) Recommendations

PARTS OF CONCEPT PAPER

a. INTRODUCTIONThis is the part that discusses the significant details of the product/service and why the product/service is needed by the community.


b. OBJECTIVESThis part gives the details of the business both specific and general.


c. RATIONALEThis part focuses on the advantages of putting a certain business.


d. TERMS & CONDITIONSIn this part, specific agreement from particular to general things are clarified.


e. RECOMMENDATIONSThis part is very important because it helps to improve the project in the future.


A concept paper is a document written to convince potential funders to sponsor a product, program or service.

Concept papers vary in format and specifics depending on the organization, but are generally concise documents containing information, statistics and persuasive arguments.

HOW TO WRITE A CONCEPT PAPER

STEPS:1. Acknowledge the role of the sponsoring organization.Demonstrate your knowledge of the private or public organization by summarizing the nature of its involvement in the project.For example, if the funders are dedicated to advancing literacy in developing nations, acknowledge their successful history in this area.

1. Acknowledge the role of the sponsoring organization.

STEPS:2. Describe your team or organization.Explain the core objective of your project.For example, you may be an instructional software company that uses software programs to teach reading skills to disenfranchised populations. Clearly convey your position as it relates to the goals of the funding organization.

2. Describe your team or organization.

STEPS:3. Identify the problem.Funders read your concept paper because they have a shared interest in the problem. Describe the core issue. Explain the problem in enough detail to convey your background and expertise with the issue. If necessary, include data to demonstrate the extent of the problem.

3. Identify the problem.

STEPS:4. Include an assessment of previously applied methods.This may be a report of your past successes with a similar project. Or it may be a reference to a history of successes experienced by various organizations who have applied your specific solution to the problem.

4. Include an assessment of previously applied methods.

STEPS:5. Explain how you will meet the need.Describe the product, service or program. Be clear and concise. Use language that the reader will easily understand. Avoid using technical language for a non-technical audience.

5. Explain how you will meet the need.

STEPS:6. Outline your intended objective.Your solution to the problem may save money, advance learning or prevent health issues. Include quantitative details, such as the number of people who will benefit, how much time will be saved or the amount of profit that will be generated.

6. Outline your intended objective.

STEPS:7. List the resources necessary to offer the services.This may include a list of materials to build a product or the type of personnel required to provide the services. A detailed list will demonstrate your grasp of the project's needs and your readiness to provide the product or service.

7. List the resources necessary to offer the services.

STEPS:8. Establish a time line for delivery of services.Explain how long it will take to build the product, deliver the service or manage the project. The time line should be both realistic and efficient.

8. Establish a time line for delivery of services.

STEPS:9. Specify the amount of funds you are requesting.If possible, research the amount of money that the funding organization has available to stay within its budget. Asking for an amount that exceeds the available funds may result in an immediate dismissal of your program, project or service.

9. Specify the amount of funds you are requesting.

STEPS:10. Summarize the concept paper by describing the outcome.Close with a few sentences to ensure the sponsoring organization that an investment in your team or organization will meet objectives and solve the specific problem.

10. Summarize the concept paper by describing the outcome.

STEPS:11. Include your contact information.List your name, address, website, phone number and email address.

11. Include your contact information.

BUSINESS PLAN

A business plan describes the nature of the business, the sales and marketing strategy, the financial background, containing a projected profit and loss statement

BUSINESS PLAN

a) The environmentb) Behavior of the productc) Location of the businessd) Organizational plane) Production planf) Financial plan

COMPONENTS OF BUSINESS PLAN

a. THE ENVIRONMENTThe needs of the people in the community should be identified.


b. BEHAVIOR OF THE PRODUCTYou should know the market trends, product demand in the community, the resources, quantity and quality goods in buying.


c. LOCATION OF THE BUSINESSYou should consider the place where customers prefer to buy.


d. ORGANIZATIONAL PLANThe needed workers in the business must be listed in organizational chart.


e. PRODUCTION PLANThis involves the manpower, money, machinery, materials and methods to be able to produce the desired output based on anticipated profit.


f. FINANCIAL PLANYou, as an entrepreneur, need to determine the fiscal needs of the business and the sources of needed funds.


PROJECT PROPOSAL

This is the initial document that converts an idea or policy into the details of a potential project.

PROJECT PROPOSAL

a) Executive Summaryb) Justificationc) Procedured) Objectivese) Project Organization &

Managementf) Budget

PARTS OF A BUSINESS PROPOSAL

a. EXECUTIVE SUMMARYThe overview of the proposal from beginning to end should be stated in the project proposal.


b. JUSTIFICATIONThis emphasizes the need of the proposal.


c. PROCEDUREThe steps are being explained where to start and to end.


d. OBJECTIVESThe goals or targets of the business are defined.


e. PROJECT ORGANIZATION and MANAGEMENTThe manpower and function of each are clearly stated.


f. BUDGETYou should determine the source for the input and output, the profits and the loss of the business.


LET’S APPLY WHAT YOU HAVE LEARNED

Directions: Think of a service type of business which you feel is a good venture to invest on.

APPLICATION

PART 1: Make your own concept paper to support your business ideas and plans.Title of your concept paper:Introduction:Objectives:Rationale:Terms and conditions:Recommendations:

PART 2: Using your data in the concept paper, conceptualize a Business Plan. Fill in the data regarding the Components of a Business Plan.Environment:Location of the business:Behavior of the product:Organizational plan:Financial plan:

types of business plan

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