An Overview to

Business Planning

Chantal May D. Lipata

Definition of Business Plan

“A written document prepared by the entrepreneur that describes all the relevant external and internal elements involved in starting a new venture. An integration of functional plans such as marketing, manufacturing, and human resource…”

Hisrich and Peter

Definition of Business Plan

“A document that convincingly demonstrates the ability of a business to sell its products or services to make satisfactory profit and be attractive to potential backers.”

David E. Gumpert

Other definition

Planning

What to expect in the future

When to do

it

How to do

itWhat to do

it

Thinking ahead of objectives, strategies, financing, production, marketing, profit prospects , and growth possibilities.

Involves attainment of goals and ways to accomplish such goals.

Principles of Planning

For micro and small business:1. Planning must be realistic.

– It must be based on the available resources: human, financial, and physical resources.

2. Planning must be based on felt needs.– The objectives of an entrepreneur should fit the

needs of the people in a community. It can be known through observation, personal interviews, and questionnaires.

3. Planning must be flexible.– Resource needs and economic conditions change.

Planning should be adjusted to such changes to be effective and relevant.

4. Planning must start with simple projects.

Stages of Business Planningby: Philip Kotler

• At the start of business, owner-manager is busy looking for funds, customers, materials and equipments.

Unplanned Stage

Criteria of Effective Planning

The plan should…1. State clearly its objectives.2. Provides measures for a satisfactory

accomplishments of the objectives.– In terms of QUANTITY, QUALITY, TIME AND COST.

3. State the policies.4. Indicate what department/unit would be involved in

accomplishing objectives.5. Indicate the time allowed for each activity.6. Specify the required resources.7. Designate the officers.

Components of Business Planning

1. SWOT. The chances of a product or service can be evaluated through the SWOT analysis. Every product or service has its own strength, weakness opportunity, and threat. Planning should include the improvement of the product/service in order to survive competition.

2. OBJECTIVES. – Specific and realistic (can be daily, weekly,

monthly, and yearly).3. STRATEGIES. Ways of accomplishing the

objectives (stated in the financial, production, marketing, and organizational plans).

4. TIME FRAME.

Characteristic of a Sound

Business Plan

1. OBJECTIVE2. CLEAR3. LOGICAL AND SIMPLE4. FLEXIBLE5. STABLE6. COMPLETE AND INTEGRATED