UNIT – 3

► Product or Project identification (Business Idea)

● Environmental Analysis – Search & Scanning
● Identifying Problems & Opportunities
● Defining Business Ideas
► Developing a Project Report (Business Plan)
► Basic govt. procedures to be compiled with
 What is Business Plan ?
Once a business idea has been
generated, a business plan must be
generated.
A business plan articulates what you hope
to achieve and how you will do it.
Discuss the strengths and weaknesses of
your business idea in the plan
Marketing/Financial/Operational/Strategic
details take precedent over technical
details
Reasons for a business plan
● Starting a new business
● Buying a new business
● Expansion of current business
● Applying for grants
Who reads and needs your business plan?
● Bank managers / Financial Institutions
● Alternative providers of finance
● Business advisory organizations
● Friends and colleagues who can invest in your
business
● Yourself and the people you work with
 Business Planning Process
-- The entrepreneurial process
-- Detailed SWOT analysis
-- Evaluation of favorable environment

Business Environment

External Environment Internal Environment

♦ Political Environment ♦ Suppliers of inputs

♦ Legal Environment ♦ Workers and trade unions
♦ Socio-cultural ♦ Customers and consumers
♦ Demographic ♦ Market Intermediaries
♦ Technological ♦ Competitors
♦ Natural ♦ Publics – Media, Consumer
Protection group, Local
Lobbyists,
The Entrepreneurial Challenges :
● Opportunity Identification
-- All pros and cons
-- Process of new product development
● Perfect Business Plan Development
-- Viability of the opportunities (Idea screening)
[Blueprint of detailed procedure to convert a business idea into a successful
business venture].
-- Always written document – Road map
♦ Easy to evaluate performance & path
(present status, goal & strategy to reach goal)
-- 3 essential plans to consider
♦ Financial Plan
♦ Marketing Plan
♦ Operational Plan
** Most advisable to hire a seasoned professional / consultant to draw a business plan.
● Details of resources required
-- All sorts of resources

-- Evaluation of risk involvement

-- Whether financially viable or not

-- Estimation of return on investment over time

-- Estimation of Product life cycle

● Management of the Enterprise / Venture

-- Actual action phase

-- To face the reality

-- Constructive criticism

-- More strategic

-- Corrective measures

-- Monitor the progress

-- Persuade others to join the business

 Scope of Business Plan
► Business plan is aimed at several audience
-- Must satisfy the needs of all possible audiences to attract them

Audience Views

Entrepreneur Marketing Investors

▪ Product / Service a ▪ Competitors ▪ Attract others to

sure success analysis invest
▪ SWOT analysis at all ▪ Market size ▪ Risk sharing
levels estimation
▪ Responsibilities
▪ Objective clearly ▪ Customer sharing
defined demography
▪ Profit Vs Time,
▪ Time bound plan of all ▪ To attract vendors Money and Efforts
aspect of the venture and suppliers
▪ Hindrance analysis ▪ Consumer
behavior
 Product /Project Identification Business
Planning Process
IDEA GENERATION &
IDEA SCREENING

ENVIRONMENTAL SCANNING

FEASIBILITY ANALYSIS

PROJECT REPORT PREPARATION

EVALUATION CONTROL & REVIEW

 Essentials of Business Plan
♦ Sequentially arranged the project report
♦ Carry all details of the proposed venture
♦ Not very lengthy and biased
♦ Explanations of projections logically & objectively
♦ Projection must be ideal, realistic and not hypothetical.
♦ Projection at least from 2 to 10 years
♦ Project report be professionally prepared
♦ Must reflect the entrepreneurial capabilities of the
promoters
♦ Justify the financial needs and financial projections
♦ Justify the demand in the market and prospects
♦ Attractive for investors, financial agencies & buyers
♦ Have a high artistic value
♦ Consideration of enterprise social responsibility
 Developing A Project Report
1. Cover Page
It should must have the following information
● Project report title
● Name of the enterprise
● Person name who prepared the report
2. Introduction
● A brief description of the proposed report
● Name of the owners
● Address of the headquarter
● Telephone, Email and proposed website (if any)
● Name and address of the promoters
● The business concept and its feasibility
● The amount of finance involved and required in the venture
● A statesmen that it is confidential and not known to anyone
● Table of content
3. Executive Summary
● First impression about the business proposal
● After preparing the entire report but placed at the beginning
● To attract the attention of evaluators
● Not more than of 2 or 3 pages
● All the factual details to impress its marketability
● Purpose being the to generate interest among audience

4. Industry / Sector Analysis

● The history of the sector and the industry
● Current scenario
● Future trends or projections
● Competitors analysis
● Customers analysis (Demography & Behavior)
● Government control and intervention
● Government support to the industry
● Scope for going global / market expansion
5. Enterprise / Venture Detailed Description
● Product or Service details
● Business locality
● Supporting Infrastructure details
● Relevant and adequate Skills of human resource
● Applicable office equipment requirement
● Background of the promoters (family and educational /technical)
● Personal background of the entrepreneur
● Valid reason and purpose for starting the venture
● Time bound details of the project (Project complete tentative date)

6. Production Plan
● Scope of the Production
● Details of subcontracting (if any) including cost involved
● Pictorial representation of production process with diagram
● Raw material requirement and suppliers details & anlaysis
● Manufacturing cost estimation
● Future projection in investment and market share
● Control on inventory and waste or misuse
7. Organizational Structure and Plans
● Details of managing the enterprise
● Ownership type – Partnership / Limited etc.
● Details of board of directors individually
● Prime shareholders (if any) details
● Details of the members running the enterprise
● Roles and responsibilities of all key players
● Details of salary, perks etc.

8. Marketing Plans
● Details of Product, Place, Price and Promotions (8 for service)
● To attract investors marketing plan should be lucrative
● Well defined marketing goal
● Path outline to achieve targeted goal
9. Risk Projection
● Risk involved at all stage
● Strategy to overcome risk at all stages
● Counter strategy to counter risk
10. Appendix
● Details of all reference source to boost authenticity and
originality
● All relevant details to develop confidence in ownership
● Copies of the MoUs (if any)
● All documents must be in relevance of the business plan (Not
to mislead)
● CV of the promoters
● Certificate from pollution board
● Articles of association
● Letter of the industrial association membership (if any)
● Letter of the chamber of Commerce association (if any)
● Other documents to support marketing and enterprise capability
● All sorts of agreement letters
● Supporting graphs, data etc.
 Environmental Analysis – Search & Scanning
► Answer to the risk, its measure and how to tackle and overcome.
► Apart from all internal and external environment analysis
-- Economy (GDP, employment statistics, lifestyle, disposable income etc.)
-- Culture (Attitude, beliefs, health concern, trends, safety habits, Awareness of
consumer rights, traditions etc.)
-- Technology trends knowledge (All technology that are instrumental in business
operation as mobile, internet etc.)
-- Industry Forecast (Competitors trends for new entrants, consumer behavior,
buying pattern, associations, chamber of commerce, trade journals etc.
-- Legal Consideration (Permission from authorities, bodies, safety regulations,
advertising restrictions, well planned organizational structure)
-- Market Completions (Analysis of major and minor existing players and possible
future competitors)
-- Business Ingredients (Raw material availability, alternative of raw materials in
shortage, transportations etc.)
 Identification of Problems & Opportunities
■ Information Source
-- Consumers
-- Buyers
-- Business Associates
-- Colleagues
-- Peer groups
-- Technocrats
-- Friends
-- Market Intermediaries
-- Associates
-- Experience & Realization
-- Market Research
-- Social conditions
-- Competitors analysis Vs demand forecast
-- Hobby expansion
Basic Govt. Procedures for Entrepreneur
◙ Permissions from all concern authorities
◙ All sorts of license requirement
◙ Govt. tax and other duties
◙ Enterprise registration
◙ Perfect enterprise documents
◙ Clear and transparent financial statement
◙ Individual and corporate tax
◙ Employees provident fund and other prerequisites
◙ Employees group insurance
◙ Trade union permission and association
◙ Location permission
◙ Insurance of the assets
◙ Adequate safety measures