Business Planning PDF

BUSINESS PLANNING Group 1 BUSINESS PLANNING Presented By: Group 1 PLANNING THE BUSINESS TO ESTABLISH Planning is the defining of goals for future organizational performance and deciding on the tasks and resources needed to attain them. Applied to manufacturing,...

BUSINESS PLANNING Group 1 BUSINESS PLANNING Presented By: Group 1 PLANNING THE BUSINESS TO ESTABLISH Planning is the defining of goals for future organizational performance and deciding on the tasks and resources needed to attain them. Applied to manufacturing, it involves planning for (1) the product, (2) the process, (3) the facility location, (4) the facility layout, and (5) the jobs. Facilities are the location and layout. PLANNING THE BUSINESS TO ESTABLISH Product planning involves determining: a. how the product meets customers' needs, b. how long it takes for the product to make and to be marketed, and c. the total cost to the customer PLANNING THE BUSINESS TO ESTABLISH Process planning deals with determining the specific technologies and procedures required to produce a product or service. PLANNING THE BUSINESS TO ESTABLISH Facility location planning deals with the identification of the place where the manufacturing process will be situated. A. proximity or nearness to customers b. business climate c. total costs d. transportation facilities (or infrastructure) e. quality of labor f. supplies g. location of company sother facilities h. peace and order condition i. government laws, rules, and regulations j. environmental regulation k. host community l. competitive advantage PLANNING THE BUSINESS TO ESTABLISH Facility layout planning involves the placement of departments, workstations, machines, and inventory storage within the factory. Its objective is to ensure smooth workflow. A. objective or purpose of the system in terms of output and flexibility. b. product and service demand c. number and volume of operations d. space availability PLANNING THE BUSINESS TO ESTABLISH Job planning or job design is the function of specifying work activities of an individual or group in an organizational setting. Its objective is to develop job structures that meet the requirements of organizations as it satisfies the employee's personal and individual requirements. a. tasks to be done b.qualification of worker c. physical location d. workingtime e. reason for hiring f. performance measurement g. motivation h. training BUSINESS PLANNING Marketing, the activity involved in moving products from the manufacturers to the customers is divided into 4P's (Promotion, Product, Price and Place)  BUSINESS PLANNING Promotion, in its broad a. Personal selling involves direct communication between sellers and definition, means telling the potential buyers. target market about the product. b. Mass selling is communicating with a It requires effective large group of buyers at the same time. communication and involves The communication with large groups of buyers may be done through personal selling and massselling. advertising or through publicity. The objectives of promotion are c. Advertising is a paid form of (1) to inform, (2) to persuade, and presenting the product while publicity (3) to remind. is not paid for. d. Sales promotion refers to activities that stimulate interests, trial, or purchase by final customers.  BUSINESS PLANNING ADVERTISING PUBLICITY SALES PROMOTION Magazines Press Coupons Newspapers conference Contest Radio Talk shows Trade shows TV Human Sporting news Signs interest write- Samples Direct mails ups Catalogues Articles in Flyers trade magazines  BUSINESS PLANNING Creative Pricing For example, When the seller sells a dozen pande sal at the controlled price Computing selling prices may of P2 per piece or at a discounted price of P20 per dozen, he knows that he will start with Cost(A) or may start be setting the minimumdesired profitat with Selling Price(B). P5 per dozen. The profit of P9 or P5 gives the seller flexibility in marking up" or marking down" selling prices. (A) Direct Cost ₱10 Materials Flour COST (direct+indirect) P15 Salt + MARK-UP (profit) 5 Sugar SELLING PRICE 20 Indirect Cost Rent 5 ₱15  BUSINESS PLANNING The profit is the mark-up or add-on in The other method is when the price is the cost. There are two ways of dictated by the customer, competition, determining selling process. or government regulation. The entrepreneur has to start with the The usual way is to start with cost, selling price, subtract the desired profit and add the desired mark-up to get to arrive at the cost of materials, labor, the selling price. This is the method and overhead. The resulting cost of when the entrepreneur feels that materials labor and overhead is called pricing is not very much limited by predetermined or standard cost, which competition or by the dictates of the is computed as follows customers. (B) SELLING PRICE P20 - MARK-UP (profit) 5 STANDARD COST (direct+indirect) 15 BUSINESS PLANNING The product orders start with quality product and acceptable price. This involves creating a good image for the product and for the company. For retailers, the store should make the For the product, good image include customers buy at first sight. Buying at product features and packaging first sight is the instinctive reaction of designs. Continuing advertisements customers to buy right away. For the through" word of mouth" are very helpful especially for new business retail outlet, good image includes right that cannot yet afford expensive store design, signages, display, and advertisement. Whenever possible, unique architectural details to lure the planning should allocate budget customers into the store and make for advertising through print, radio, them buy. or TV.  01 PRICE Consumers Evaluation of the Purchase Process 02 PRODUCT QUALITY The factors that guide 03 CONVENIENCE consumers in the purchase process are: 04 IMPACT OF PROMOTION  Consumers buy products 01 FOOD because of the" need" or because of want". Needs are the basic forces that motivate a 02 DRINK person to do anything. Wants are needs that are leamed 03 REST during a persons life. The physiological, safety, social and personal needs of consumers 04 SEX are: Physiological needs are:  01 HEALTH FOOD Safety needs are concerned with protection and physical 02 MEDICINE well-being like: 03 EXERCISE  01 LOVE Social needs are concerned 02 FRIENDSHIP with an individual interaction with others like: 03 STATUS 04 ESTEEM  01 SELF ESTEEM Personal needs are concerned with the need for personal satisfaction unrelated to what others think or do 02 ACCOMPLISHMENT like: Moreover, consumers buying is also 03 FUN largely influenced by attitudes and psychology. Buying is also affected by 04 FREEDOM relations with other people like family, social class, culture, and other groups. 05 RELAXATION GOOD LOCATION AND WORKPLACE Listed in the section for facility of location planning are the criteria for selecting a site for a business. For a The other Producers of Another A good manufacturing workplace is consideratio ready to eat consideratio business, it is one that n is the products n is total conforms to the important that locate costs. availability standards of it be located in of raw themselves the industry an area where materials. where the and the rules quality labor is customersare. set by the abundant. government. BUSINESS PLANNING Home-Based Business For varied reasons, the business may be home-based. We see a lot of cottage industries that are home-based. Some entrepreneurs leave their corporate employment to be close to their young children. They put up their home-based businesses with plans of moving to other work site as their businesses grow. When the business is home-based, there should be clear physical and time boundaries between the business and the home. The area for business should be identified and the time for work should be known to workers and clients.  SALES MEETING FINANCIAL SUPPLIER/PRODUCER OF GOODS AGENT/TRADER OF GOODS CUSTOMER REQUIREMENTS BUYS ON CASH SELLS ON CASH The financial requirements of OR CREDIT OR CREDIT the business will depend upon the nature of the business and the nature of the product. A direct door-to-door selling activity, for example, may require a very small capital for the sales agent/trader. -requires biggest capital -requires small capital -need to meet certain -there is limited government government regulation regulation or none at all  BUSINESS PLANNING 1. fixed capital for land, building, rental deposits, improvements, machinery equipment, fumiture, andtools. The fixed capital is for assets If the entity is to engage in manufacturing, an even that will last fort long period of time. bigger capital is needed. Service business may 2. working capital for day-to-day operations startas personal service of the individual until the cash comes in from regular business. entrepreneur who may only need a home-based This is the cash requirement in the first few office and therefore require minimal capital. months from the formation of the business. 3. organization costs or expenses. This is the However, as this service entity grows, the cash cost of putting up the legal business entity. It is requirement increases. For certain types of the amount paid to lawyers and accountants in business, laws may require minimum the writing of contracts or agreements and fees capitalization. The financial plan will consider the paid to government offices to register the cash requirement for. business. 4. contingencies or unforeseencosts. This may be an estimated amount for reserve for contingencies or unforeseen events. BUSINESS PLANNING SOURCES OF CASH the personal loans from loans from banks money of the relatives and and other entrepreneur lending friends institutions investors government assistance Non-Government Organizations (NGO) programs Rules for Sound BUSINESS PLANNING Financing an entrepreneur should be guided by sound financing rules such as: 5. if borrowingsare 1. know the cash 4.owners needed for fixed requirements. investments assetsor working capital 2. know the best should be more a. finance fixed assets terms than the from long-term 3. know how and borrowings borrowings b. finance working when to pay capital from short- term borrowings  BUSINESS PLANNING Group 1 THANK YOU! Presented By: Group 1