Business Plan: Definition, Purpose, Market Need Identification - PDF

LPU BATANGAS UNIT 2 THE BUSINESS PLAN Lesson 1 Definition, Purpose, and Market Need Identification Presented By John Cristopher A. Gamboa Learning Objectives At the end of the lesson, students should be able to do the following: Define what is a business plan. Identify the purpos...

LPU BATANGAS UNIT 2 THE BUSINESS PLAN Lesson 1 Definition, Purpose, and Market Need Identification Presented By John Cristopher A. Gamboa Learning Objectives At the end of the lesson, students should be able to do the following: Define what is a business plan. Identify the purposes of a business plan. EXPLORE Identify market needs. Which of the stalls in your school Discuss the different parts campus has a lot of students of a business plan. patronizing their product or service? WHAT IS A BUSINESS PLAN? A business plan is a written description of the business that you will establish in the future. A business plan can be written before or during the first few years of the enterprise. This is to guide the entrepreneur on which strategies would be most beneficial for the enterprise to take.  Why prepare a business plan? The business plan is the blueprint of your proposed business. Key Stages in the Product Development Process To test the To give your new To secure To make To attract feasibility of your business the funding business investors business idea best chance of planning success more effective  Three Factors of a Good Business Plan Composing a business plan is tedious, however it's basic if you want to have an effective business that will endure the startup stage. It’s realistic It’s specific It’s followed through A realistic business plan accounts for the feasibility of implementation. If the business plan is not practical or too good to be true, then, no operational method can be devised to achieve the strategy.  Identifying Customer Needs Identifying customer needs is the method of determining what a client needs from a product. Customer needs are non- technical, and they reflect the customers’ perception of the merchandise, not the particular style or specifications, though oftentimes they're closely connected. Identifying Customer Needs 5 categories of attributes in the Kano ( Japanese professor Noriaki Kano ) model Attractive Quality When these attributes are met, customer satisfaction increases. In contrast, the absence of “attractive quality” attributes does not cause a decrease in satisfaction among customers. Often, customers do not expect the appearance of these attributes initially, but their occurrence causes unexpected joy. Example: Availability of regional, homemade products during breakfast at the hotel. Quick and uncomplicated problem solving by the Customer Service Office. Free samples for online ordering. One-Dimensional Quality Those are the attributes that increase satisfaction when they are met and decrease satisfaction when they are not met. Typically, these attributes determine the competitiveness of a service or product. Example: Waiter service at a hotel. Time taken by the Customer Service desk to resolve a specific problem. Pizza temperature at the time of delivery to the customer by a delivery man. Identifying Customer Needs 5 categories of attributes in the Kano ( Japanese professor Noriaki Kano ) model Must-Be Quality These are attributes that are considered essential by customers. Customers absolutely expect them. If these attributes work properly – customers are neutral. It does not increase their satisfaction. On the other hand, if these attributes do not work properly – customers are very dissatisfied. Examples: Clean room in a hotel. Greeting a customer during a business meeting. Completeness of an online order. Indifferent Quality These attributes do not affect customer satisfaction in any way. Often customers are not aware of the difference between the attribute and its replacement. Companies can use this fact to reduce the cost of their business. Example: The thickness of the cardboard box in which the order is packed. Exceptional courtesy of hotel staff. Pouring a drink into a glass in a restaurant by a waiter (instead of serving a glass and a drink in a bottle). Reverse Quality These attributes relate to the belief that customers are different and have different needs and expectations. Providing additional attributes for some customers may be a “bull’s eye” and a waste of money for others (because the some value will be unnoticed by them). Example: Enhanced technology features on the phone. Using specialized words when talking to a potential customer.  Customer Needs Identification Using the 4-step Method Gather Raw Data Gather Raw Data The students gathered data using interviews to identify their needs.. nterpreting Data Interpreting Data The students analyze the data and omit data that are not essential and aligned with their research. Organizing Data Organizing Data They categorized the data gathered based on its nature. For instance, junk foods, beverages, main dishes, side dishes, etc. Reflect the Process They will decide if the process is enough for the business Reflect the Process plan.  LPU BATANGAS UNIT 2 THE BUSINESS PLAN Lesson 2 The Business Plan Contents (I): Introduction, Executive Summary, and Proponents Presented By John Cristopher A. Gamboa Business Plan Introduction The business plan introduction serves as the “birds-eye view” of your plan. EXPLORE Why is it important to have an It is written at a high level introduction to every product or service while not going into details. that we have? What is the difference between the business concept and business model? The Business Concept A business concept should have the essence of the business in a short but powerful manner. The Business Model A business model is a formula on how the business plans to make money out of business. Explanation: Business Concept talks about the different ways on how to develop the business and after the recommendation we can say this as a Business Model to fully give the right ways to make the business in prosper.  Four Areas of Business Modelling AREA 1 AREA 2 AREA 3 AREA 4 Raising The cost of the enterprise products Major Financing the investments of revenue and other costs of doing business the enterprise investment Why should you have measurable goals and objectives in your business plan? The Business Goals Goals tell you wherever you want to go; objectives tell you precisely the The business goals show the long-term and way to get there. future prospects of the enterprise. It is composed of the vision, mission, objectives, Goals will increase your effectiveness; objectives back your goals, and cause key results area, and performance indicators. you to be more economical. Goals are usually represented in words; objectives usually go together with numbers and specific dates. Always think of a goal that is measurable. By establishing measurable goals, you'll be able to track your progress and acknowledge right away once your efforts are going off target. Types of Stakeholders Resource Mobilizers Technology Providers and Applicator Government and Top Management Operations and Support Team Each of the proponents has something to contribute, and they can be divided based on their capabilities, skills, and interests. The Executive Summary The executive summary summarizes the necessary details of the business plan for its readers. It is timesaving for readers, for they are able to get the gist of the business plan. Contents of the Executive Summary The business opportunity Taking advantage of the opportunity The target market TIP: Business model In writing your executive summary, you already need to capture the audience's Marketing and sales strategy attention immediately so that they are motivated to read the remainder of the The competition document. You need to end your business plan’s Financial analysis executive summary with a strong and Owners/Staff clinching closing sentence that will justify why your proposed business is a winning Implementation plan one.  What are the things that you need to keep in mind when writing your executive summary? On Writing an Executive Summary Focus on providing Keep your Keep it Polish your Put a summary. language sturdy short. executive yourself in and positive. summary. your readers’ place.  LPU BATANGAS UNIT 2 THE BUSINESS PLAN Lesson 3 The Business Plan Contents (II): Target Customers, Value Proposition, Market, and Product Offering Presented By John Cristopher A. Gamboa  Target Customers The target market refers to a selected and well-defined client segment among the businesses’ serviceable market. A 'Target Customer' refers to a specific group of customers that a company aims to attract and serve with its products or services. It involves the process of segmentation to allocate resources effectively and reach customers through appropriate channels.  How to define your market? Segment the market: Segment the market: Segment the serviceable market consistent with their demographics, geography, psychographics, and behavioral patterns. Identify the Unique Selling Identify the Unique Selling Proposition (USP): Proposition (USP): The USP is what differentiates you from other competitors. It's why shoppers like your product over others. Analyze the customer Analyze the customer base: If you’re already in business, the most effective way to outline base: your target market is to gather your client information and to analyze it. Analyze the competitors’ customer base: Who does your competitor aim to target through their Analyze the competitors’ customer promotional efforts? Where do they sell their products? You base: can either choose the same target market or opt for a rather completely different phase. Value Proposition A value proposition refers to the worth an organization guarantees to deliver to customers should they prefer to obtain their product. A company's value proposition tells a customer the number one reason why a product or service is best suited for that particular customer. A value proposition should be communicated to customers directly, either via the company's website or other marketing or advertising materials. Value propositions can follow different formats, as long as they are "on brand," unique, and specific to the company in question. A successful value proposition should be persuasive and help turn a prospect into a paying customer. Value Proposition Create a robust differentiation between you and your competitors. Increase the standard of prospective leads. Gain market share in your targeted segments Improve your operation potency. Increase your revenue. Ensure that everybody in your company communicates a similar message. Product and/or Services Offering 1. a short explanation of the products or services you are offering 2.the proposed price of the products or A product offering refers to a tangible item that services you sell to customers, such as a physical product 3.differentiation between your products or software. On the other hand, a service offering or services to be offered and your involves providing intangible services or expertise competitors’ offering to customers, such as consulting, maintenance, 4.information about your marketing or professional services. styles and strategies 5.the process on how your customers will process or fulfill their orders 6.any legal issues that you need to address like intellectual property and/or trademarks 7.any products or services you plan to offer in the future  REMEMBER The business plan’s products and services section is the heart of the business plan itself. While other parts of the business plan are also important, the products and services section is the soul of the business. All other parts of t he bu s i ne s s p l a n s h o u l d b e anchored in this section.  LPU BATANGAS UNIT 2 THE BUSINESS PLAN Lesson 4 The Business Plan Contents (III): Enterprise Strategy, Financial Forecasting, Compliance, and Capital Structure Presented By John Cristopher A. Gamboa  Enterprise Strategy Enterprise strategy is a set of choices and actions geared toward gaining a sustainable competitive advantage. Enterprise Strategy represents the highest order choices an organization makes to create value for their key stakeholders. It is a comprehensive process organizations use to define their strategic, financial, and operational goals, and to develop detailed plans for achieving those goals. Process of Enterprise Delivery System The output will be delivered to the customers through the MARKETING unit of the enterprise delivery system. The marketing would include the right The enterprise delivery system involves packaging, pricing, promotion, selling harnessing human, money, and physical and distribution, and the location where resources from well-selected suppliers. These the target customers can best be found. resources become the INPUT that the operations unit within the enterprise delivery system will convert or transform into OUTPUT. The business outcomes should reasonably include: high customer satisfaction levels; high sales volume, market share, and market reach; high financial returns; and high people’s performance, productivity, and morale levels.  Financial Forecast It refers to the capital investment and sources of funding in the operation of the business.  Balance Sheet The balance sheet shows the financial position of the enterprise as of the given period of time. It reflects the total assets, liabilities, shareholders, and earnings preserved to fund future operations or to serve as funding for expansion. You can use the balance sheet to work out a way to meet your financial obligations and discover the most effective way to use credit to finance your operations. Example: Balance Sheet Example: Balance Sheet Income Statement The income statement shows the revenues, cost of goods sold, operating expenses, other income and expenses, financing costs, income taxes, and bottom- line figures.  Cash Flow Statement It is a projection of money receipts and expense payments. It shows how and when money flows through the business. It provides verification of whether a company has enough liquidity or money to pay its expenses. A cash flow statement may be a valuable measure of strength, profit, and the long-run future outlook for a company.  Environmental and Regulatory Compliance The business plan should articulate the laws and regulations governing the business, and also on how the enterprise operates. It should lay out the plans for acquiring the required permits, licenses, and authority to use proprietary intellectual capital. Bureau of Internal Barangay Department of Mayor’s Sanitation Securities and Revenue - Tax Clearance Trade and Industry - Permit/ Permit and Exchange Identification Business Name Business Fire Commission Number (TIN) Registration Permit Clearance (SEC) Certificate Certificate Capital Structure The capital structure refers to the combination of debt and equity to use as the company's fund and finance its operations. Contributed capital It is the money that was originally invested in the business for shares of stock or ownership in return. Retained capital These are profits from previous years that have been secured by the business and used for fund growth, acquisitions, or expansion. Long-term bonds It is generally considered one of the safest types because the business will have several years to pay the principal while paying the interest only in a short period of time until the loan matures. Capital Structure Vendor financing It happens once a company sells a product before having to pay their vendor. This could dramatically increase the company's return on equity while not costing the business any upfront. Policyholder float financing In the case of insurance firms, this often refers to cash that does not belong to the business; however, it earns an investment until an insurance claim has been made. Different types of capital impose different kinds of risks for a company. For this reason, capital structure affects the worth of a company, and so a lot of analysis goes into deciding what a company's best capital structure should be.  THANK YOU For your attention and participation Presented By John Cristopher A. Gamboa