Entrepreneurship Module 2 PDF

 The Development of the Business What is a Business Plan? A business plan is a document containing the ` entire skeletal plan of a business It is considered as the blueprint of all business establishments Users of The Business Plan ENTREPRENEUR...

 The Development of the Business What is a Business Plan? A business plan is a document containing the ` entire skeletal plan of a business It is considered as the blueprint of all business establishments Users of The Business Plan ENTREPRENEURS ` INVESTORS AND FINANCERS MANAGERS AND STAFF Entrepreneu rs Set a NAVIGATIONAL COURSE ` for the business Investors and Financers Decide whether they invest ` MONEY or not  Managers and Staffs ` STRATEGIES and PROGRAMS for the enterprise prepare a Business Plan? Prior to setting up an ` enterprise During the first few years of the enterprise Concept VS Business Model Business concept contains the essence of the enterprise in a concise but powerful ` manner. It stresses the value of the product offering to the target customers who would most likely but it. Concept VS Business Model Business model is a formula on how the enterprise exactly plans to make money out ` of the business.  Four Areas of Money Making in a Business Model 1. How will the business raise revenues? What critical factors will cause the revenues to be realized? ` 2. What will be the cost of the enterprise products and other costs of doing business? How will these costs be managed to ensure comfortable profits? What critical factors will drive the costs? How can these costs be controlled?  Four Areas of Money Making in a Business Model 3. What will be the major investments of the enterprise? Why will these investments give the enterprise competitive ` edge? 4. How will the enterprise finance the investments? How will the enterprise fund its growth? Parts of a Business Plan Introduction Executive Summary ` The Business Proponents Target Customers and the Main Value Proposition Macro environmental factors The Product and Service Offerings Parts of a Business Plan The enterprise Strategy and The Enterprise Delivery System ` The financial forecasts and expected returns Environmental and regulatory compliance The capital structure and financial offering The Executive Summary Contains everything that is relevant and important about the business plan ` The synthesis of the entire plan and must contain the major argumentations of the business proponent of why the business will work and succeed Can only be written LAST ` The Business Proponent s Third section of the business plan that contains ` the details about the business owners and the stockholders 4 Types of Stockholde rs 1. RESOURCE MOBILIZER S AND FINANCIAL BACKER S `  They want to know who else on board to share the burden of raising money for the business. 4 Types of Stockholde rs 2. TECHNOLOGY PROVIDER S AND APPLICATOR S `  They want to know if there are sufficient funds to pay for the technology. 4 Types of Stockholde rs 3.GOVERNANCE AND TOP MANAGEMENT `  They want to know what strategies and performance indicators are being proposed. 4 Types of Stockholde rs 4. OPERATING AND SUPPORT TEAM `  They want to know what programs, activities, tasks and resources that would be in place. The Target Customers and Main Value Proposition Fourth section of the business plan ` The Target Customers and Main Value Target Customers must be of sufficient size, Proposition sufficient paying capacity and have sufficient ` interest to purchase the products being offered by the enterprise. The Target Customers and Main Value Proposition Main Value Proposition is the unique selling ` proposition of the industry. Market Demand and Supply,Industry Dynamics and the Marcro Environmental Factors ` Fifth section of the business plan Supply and the Marcro Environment Law of Demand states that ceteris paribus, as the Factors price of the corresponding goods increases, its quantity demanded decreases, ` vice versa. Law of Supply states that ceteris paribus, as the price of the corresponding goods increases, its quantity supplied also increases vice versa. ` Macro Environment Factors Political Environment- defines the governance system of a country and includes all laws, ` rules and regulations including allowable and non-allowable practices Macro Environment Factors Economic Environment-mainly driven by the supply and demand forces and also with the ` interest and foreign exchange rates Macro Environment Factors Social Environment- includes the demographics and the social dimensions that govern the ` relevant entrepreneurial activity Macro Environment Factors Technological Environment- technological discoveries that lead to commercialization and ` industrialization Macro Environment Factors Ecological Environment- includes the habitat of man, animals, ` plants and minerals Product / Service Offering  The sixth section of the business plan that should contain the description, evolution and justification of the product/service ` offerings  Products must be described by highlighting the features and attributes that would most appeal to the target customers Enterprise Delivery System and Strategy Seventh section that maps the competitive ` landscape of the enterprise Enterprise Delivery System and Strategy ENTERPRISE STRATEGY builds and develops ` the game plan for attaining competitiveness ENTERPRISE DELIVERY SYSTEM is the entire process of converting inputs into outputs and these outputs into outcomes ` Things that should be included in the outcomes High customer satisfaction level High sales volume, market share and market ` reach High financial returns High people productivity and moral levels Financial Forecasts  Eighth section of the business plan  Calculates the return on sales, expected ` return on assets or investments and expected return on stockholders’ equity  Evaluate both the BUSINESS RISK and FINANCIAL RISK S involved Environmental and Regulatory Compliance  Ninth part of the business plan  More closely related to a company’s ` CSR  Business must ascertain that all necessary permits, licenses and authority must be complied with Capital Structure and Financial Offering  Tenth section of the business plan  Discusses who are the investors, the ` financers and the partners  Must appeal to the audience and should highlight the main feature of the business