What is Business Plan & Its Process ?

What is Business Plan?

A written document which explains the various Important steps to start and perform a particular task of a proposed business.

It Provides Guidance: Such As

  1. What is to be Performed?
  2. When to Performed?
  3. How to Performed?
  4. Who will Performed?
  5. And other Important activities

Need Of Business Plan / Business Plan As An Entrepreneurial Tool

  1. Provides proper guidance/direction to move on
  2. Helps in getting finance
  3. Helps in proper communication
  4. Helps in resources planning
  5. Helps in deciding budget
  6. Provides SWOT analysis

Preparation Of Business Plan/Business Planning Process

  1. Environment Scanning
  2. Establishing objectives and goals
  3. Action planning
  4. Resource requirement
  5. Alternative Strategic plans
  6. Deciding the budget
  7. Evaluation and Control

Guidelines For Developing Business Plan / Elements Of Business Planning 

(A) Cover page

(B) Table of content

(C) Executive summary (summary of description of whole Plan, Key point are highlights)

(D) Introduction page

(E) Business description

  1. Market Plan (4P’s Function)
  2. Financial Plan ( Budget, Investment, Working Capital, Balance sheet, etc.)
  3. Production Plan/Operational Plan (Plant Location, Layout, Inventory, HR,Technical, etc.)

(F) Feasibility analysis (Degree Of Ease Or Convenience)

(G) Future Goal

(H) Strategic Plan

(I) Appendix


What is Business Plan & Its Process ?


What is Feasibility Analysis?

Analysing how easily are conveniently the business plan can operated.

Understanding demand of the plan and evaluating the availability of resources.

Aspects of Feasibility Analysis:-

  1. Economic analysis – Comparison of Cost & Saving / Benefits
  2. Financial analysis – Expenditure, Available & Requirement of Funds
  3. Market Analysis – Demand, Supply, Distribution, Price, Promotion
  4. Technology Analysis – Machinery, Equipment, IT, etc.
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Steps Involved In Launching A Business 

  1. Scanning the environment for opportunities
  2. Develop the product idea
  3. Assessment of feasibility of idea
  4. Preparation of business plan
  5. Appraisal by funding agencies
  6. Project commissioning and launch
  7. Adaptation and management of growth

Formalities To Be Done For Launching A Business 

  1. Product selection
  2. Deciding the name of the company
  3. Deciding the form of Ownership (Sole proprietorship, Partnership, Corporation, Cooperative)
  4. Registration of the company
  5. Clearance from various departments (Building Plan,Trade, Pollution Control)
  6. Finance (Own Equity, State/Central Financial Institution, Banks,Others)
  7. Location
  8. Machinery & Equipments


Registration Of Business Unit

* Not Mandatory But Very Important

* Can Be Registration With District Industries

Registration Procedure Of Business

  1. Select the name
  2. Check the availability of name with ROC
  3. After name approval, Fill registration form
  4. Submit form and documents (AOA, MAO, Prospectus, Agreement if any and other relevant documents)
  5. Inspection & Approval


Forms Of Business Ownership 

Business can be started and owned by a single person or 2 or more person jointly

  1. Sole Proprietorship (Owned & Run By Single Person)
  2. Partnership (Owned & Run By Two or More Person, Share Profit & Loss [Minimum-2, Maximum-20]
  3. Joint Stock Company (Owned By Shareholders and Managed by Elected BOP)
  4. Co-operative Organizations (Legal entity, Association of Groups for common Principles)


Start-up To Going IPO

● A Start-up is a Company initiated by Individual founders or Entrepreneurs.

●Start-up is New/Young Company

●IPO – Initial Public Offering

*When a Start-up attains Success, Founders sell shares of their Start-up to the Public through IPO, To earn Profit

When To Go For IPO

  1. When company has attained significant growth
  2. When company needs more funds
  3. When company’s market size has expanded and public investors prefer to invest

IPO Process 

  1. Developed trusted and reliable management team
  2. Financial Reporting ( Prepare Accounting Professional)
  3. Choose the investment bankers
  4. Create corporate profile
  5. Register with SEC (Security & Exchange Commission)
  6. Price Your IPO
  7. Transition

Reason For Failure Of New Venture 

  1. Ineffective marketing
  2. Ineffective promotion
  3. Insufficient capital
  4. Poor planning
  5. Inappropriate location
  6. Lack of knowledge about market and industry
  7. No knowledge of market competition
  8. Poor skill of human resources
  9. Legal problems
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Revival Of New Venture 

  1. Proper and up-to-date knowledge of market
  2. Environmental scanning
  3. Focus on marketing
  4. Skilled Human Resources
  5. Better financing
  6. Dealing with legal problems
  7. Awareness of market competition
  8. Partnership with related company

Reason For Exit Of New Venture 

  1. Poor economic condition
  2. Less profit
  3. Unavailable resources
  4. High competition

Exit Option In Business 

  1. Liquidation (Selling All Assets inorder to settle the Debts)
  2. IPO
  3. Merger & Aequisition

Financing The New Enterprises 

  1. Self financing by Entrepreneur
  2. If Not Available, the next Feasible Source is Accessing Funds From Family members, Friends and Relatives
  3. If Not Available than Entrepreneur should go for other Financial Institutions Provide Funds

Need to Funds To New Venture 

  1. To meet different Cash Flow (Such as For New Machine & Equipments, Wages & Salary)
  2. For Different Capital Investment (Such as for Building, Big Machine, etc)
  3. Cash For Lengthy Product Development Cycle


Source Of Finance 

A. Short-term Source Of Finance  (Finance Required For Period Of One Year)

  1. Trade credit – Flexibility of not paying instantly
  2. Accrued Expenses – Expenses incurred but payment is not made
  3. Deffered Income – Income Received in Advance
  4. Commercial Paper
  5. Certificate Of Deposit
  6. Letter Of Credit
  7. Installment Credit
  8. Bank Finance

B. Medium-Term Source Of Finance (one to Five Years)

  1. Financial Institutions – LIC, IFCI, SFC, SIDC, IDBI
  2. Commercial Banks – PNB, SBI, CBI, etc.
  3. Public Deposit
  4. Hire Purchase
  5. Lease Financing

C. Long-Term Source Of Finance (More than five years)

  2. Debentures
  3. Term Loan
  4. Lease Financing

What is Plant Location?

● It is the Physical Location

● It is the Location/Place Where the Plant of the company is located/situated

● It is the Place where an Entrepreneur Decides to start its business operations.

● The Function of Determining where the Plant should be located for maximum operating economy & effectiveness


Decision Of Plant Location Depends upon availability of are follows:-

  1. Uninterected supply of Raw material and the labour
  2. Favourable labour climate
  3. Proximity to Market
  4. Proximity to Supplier & Resources
  5. Safet requirements
  6. Availability of Services- electricity, water, Drainage, Disposal, Communication, Parking, etc.
  7. Transportation

Importance Of Plant Location 

  1. Reducing Cost Of Production
  2. Maximum Operating economy
  3. Minimizing the transportation Cost
  4. Uninterrupted Supply of Raw materials & Labour
  5. Facing competition
  6. Better services to the Customer – timely & Uninterrupted
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What Is Plant Layout?

●  Layout means arrangement of various things in the planned manner

● Plant layout means set-up of different machines,equipments and other facilities related to core manufacturing activity.

● The purpose of having well plant layout is to ensure a prompt,hassle free and uninterpreted process of production at the lowest possible cost.

● Plant layout deals with the arrangement of the physical facilities and the main power which are required to manufacture a product or perform services.

● This plant layout ideally involves the allocation of space and the management of equipment in such a manner that overall operation costs to be minimised.

Importance of Plant layout 

  1. Overall manufacturing cost will be reduced
  2. Efficient use of available space
  3. Close monitoring of quality of product
  4. No or minimum waiting periods for job or labour i,e. Improved Productivity
  5. Speed of order execution will be faster


What is Business Plan & Its Process ?


What Is Market Assessment?

●  His market assessment is a detailed and objective evaluation of the potential of a new product, new business idea our new investment.

● A market assessment is a documented investigation of market that helps in decision making.

● It is a comprehensive analysis of environment Forces, Market Trends, Entry Barriers,  Competition, Risks, Opportunity and the company resources and constraints.

● Sale Forecasting, Market Research are Some Technique Of Market Assessment

Need Of Market Assessment 

  1. Provide awareness regarding existing market conditions. ( Opportunity & Threats)
  2. Helps in developis tactical action(strategy)for future on the basis of market conditions.
  3. Helps in forecasting (Strategies for Future)
  4. Helps in SWOT Analysis


Tools Or Dimensions Of Market Assessment 

  1. Determination of market size
  2. Market growth rate
  3. Market profitability
  4. Industry cost structure
  5. Distribution channel
  6. Market trends

What is Start-up India?

● Start up India initiative intends to build a strong ecosystem that is conductive for the growth of startups.

● Start up are small companies but they play a big role in the economic growth.

● Start up are founded by one or more entrepreneurs who want to develop a product or services for which they believe there is a demand.

● It provide a lot of jobs as well as new products and services to help grow our economy.


Benefits Offered By Government 

  1. No Inspection For First 3 Years
  2. Registration in one day by portal
  3. Income tax exemption
  4. Capital gain tax exemption for 3 years
  5. Benefit in patent and intellectual property
  6. Funding Schemes For Start-up



Conclusion: In this article we learn that What is Business Plan & it’s Process, Plant Layout, Plant Location, Feasibility Analysis, Market Assessment, Start-up India and etc.This Article Is Very Important For All students who adopt ‘Entrepreneur’ Subject.

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