Parts of

Business Plan
 The Business Concept and
I. Introduction the Business Model

The Business Goals: Vision,

Mission, Objectives

The Business Offering and

Justification
 The Business Concept and the
Business Model
A 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 buy it.
The product concept must then be translated into a
business model. A business model is a formula on
how the enterprise exactly plans to make money out
of the business. There are four areas of
moneymaking which the business model must
address:

1. How will the business raise revenues? What

critical factors will cause the revenues to materialize?
2. What will be the costs of the enterprise products and
other costs of doing business? How will these costs
managed to ensure comfortable profits? What critical
factors will drive the costs? How can these factors be
controlled?

3. What will be the major investments of the enterprise?

Why will these investments give the enterprise a
competitive edge?

4. How will the enterprise finance the investments? How

will the enterprise fund its growth?
 The Business Goals

The business goals show the future and long-term

prospects of the enterprise. It is composed of the
vision, mission, objectives, key result areas, and
performance indicators of the enterprise.
 Example: Double Happiness

The Vision of Double Happiness is “to establish a commanding

presence and market leadership as a food chain servicing major bus
terminals in Central Luzon within the next five years.

The business goals are communicated by articulating the basic

purpose of setting up the enterprise in a mission statement. Needless
to say, all business enterprises are established for the purpose of
making money for its investors.

For Double Happiness, its Mission statement is “to provide quality food
and passenger convenience services that would generate sufficient
profits for the stockholders and improve the lives of its employees.
 The vision and the mission statement must then be translated into
measurable end results, more popularly called objectives.

Objectives must be more specific than the vision and mission statements.
They should be measurable, achievable, and time-bound.

For Double Happiness, their stated objectives are:

1. To establish a strong market presence in Central Luzon;

The objectives should be translated into Key Result Areas or KRAs. KRAs
are the qualitative manifestations that the objectives are being achieved.
 Objectives Key Results Areas
1. To establish a strong 1a. Number of food outlets in
market presence in Central major bus terminals in Central
Luzon Luzon
1b. Sales volume attained
1c. Market share in Central Luzon

In turn, the key result must be rendered into quantified performance

measurements, otherwise called Performance Indicators. These
Performance Indicators or PIs serve as the aspirational scorecard of the
enterprise managers and the motivational results of the investors.
In the case of double happiness, the performance indicators for each of the
key result areas are as follows:
KEY RESULT PERFORMANCE INDICATORS
AREAS 2014 2015 2020
(Now) (One Year Later) (Five Years Later)

1a. Number of food outlets 3 5 20

in major bus terminals in
Central Luzon
1b. Sales volume attained
1c. Market share in Central ₱ 7 million ₱13 million ₱60 million
Luzon
2% 3% 12%
 III. The Business
Proponents:
II. Business Summary Organizers with their
Capabilities and
Contributions
 The Executive Summary
The executive summary contains everything that is relevant and important to
the business audience. It is a synthesis of the entire plan. It must contain the
major argumentations of the business proponent on why the business will
work and succeed. It should provide the business plan audience all the
arguments on why they should participate in the business venture.

The executive summary should then introduce and highlight the good
qualities of:

1. The business proponents and their partners;

2. The enterprise organization and its capabilities;
3. The technology providers and their expertise and experience; and
4. The suppliers and all the major service providers.
 It should likewise describe the products/services of the
enterprise, their features and attributes, and why they are the
right ones to deliver to the customers.

The Executive Summary should then proceed to discuss and

justify the Enterprise Strategy and Enterprise Delivery System.
The Enterprise Strategy builds and develops the game plan for
attaining competitiveness. The Enterprise Delivery System is the
entire process of converting input (resources) into output and
these output into outcomes.
The executive summary should also contain a section on the environmental
and regulatory compliance of the proposed business, as well as the more
proactive programs to become a more responsible corporate citizen.

Finally, the executive summary should present the capital structure of the
proposed business and show how this structure will respond to the
investment programs and financial forecast of the enterprise.

However, the Executive Summary can only be written last in order to

capture the findings and insights of the ther parts, but for presentation
purposes, it is placed in the first part of the business plan.
 The third section of the business
plan contains information about
the business proponents or
stakeholders. There are four
types of stakeholders:

The Business • Resource mobilizers and financial

backers
Proponents • Technology providers and
applicators
• Governance and top management
• Operating and support team
IV. The Target Customers

V. The Market, Environmental

Factors Affecting the Opportunities
and Threats in the Market, the Size
 The fourth section of the business
plan the Target Customers and the
Main Value Proposition
The Target Customers
and the Main Value The business proponent must be very
Proposition precise about the Target Audience or
Target Customers. Target Customers
must be of sufficient size, sufficient
paying capacity, and have sufficient
interest to purchase the products being
offered by the enterprise. The Main
Value Proposition is the unique selling
proposition of the enterprise.
 Market Demand and Supply, Industry Dynamics, and Macro
Environmental Factors

The business proponents should examine all the opportunities in this bigger
market in order to determine what exactly influence this bigger market.

The business plan should estimate the total market supply and demand for
product offerings of the enterprise . The business plan should then
determine the major critical factors that influence this market demand and
supply.

The market analysis and forecasting exercise should lead to a quantification

of the current and prospective size of the market. Both the current and
potential consumptions should be dissected.
The business plan should discuss the relevant industry dynamics:
• Who are the competing enterprises in the industry and what are their comparative
advantages and disadvantages? What business models and strategies are they
employing?
• Who are the suppliers in the industry and what are their capabilities and bargaining
power?
• What are the channels of distribution being used by the industry? How effective are
these channels?
 Both the industry players and the market are affected by the macro
environment which includes the social, political, economic, ecological, and
technological (SPEET) forces. The business plan should discuss the major
trends and changing patterns in the macro-environment, which would have
significant impacts on the relevant industry and the behavior of consumers.

-Social Environment includes the demographics and cultural

dimensions that govern the relevant entrepreneurial behavior. The
structure, social status, and dynamics of the population at large, as
well as the people’s beliefs, tastes, mores, customs, and traditions
dictate the major parameters of market behavior.

- Political environment defines the governance system of

the country or the local area of business. It includes all the
laws, rules, and regulations on allowable and disallowable
business practices.
 Economic environment is mainly driven by supply and
demand forces. It is the same factor that drives the interest
and foreign exchange rates to fluctuate with the movement
of the market forces.

Ecological environment includes all natural

resources and the ecosystem that defines the habitat
of man, animals, plants, and minerals.

Technological environment makes or breaks competing participants

in any industry. New scientific and technological discoveries often
lead to the launch and commercialization of new products with
superior attributes or to rendering the old ones obsolete.
VI. The Product and Service
Offerings

VII. The Enterprise Strategy

and Enterprise Delivery
Systems: Business
Competitiveness
 Product/Services Offering

The products/services must be described by highlighting the features and

attributes that would most appeal to the target customers. The business
plan should also prove that the products/services would be accepted and
carried by the distribution channels.
 Enterprise Strategy and Enterprise Delivery System

The business plan should expound on the Enterprise Strategy (ES) by mapping
the competitive landscape and by situating the enterprise and its competitors as to
their strategies and chosen positionings

The business plan should then show how to Enterprise Delivery System (EDS)
would enable the business to implement the Enterprise Strategy

The Enterprise Delivery System starts from the Input (resources mobilized),
proceeds to the Throughput (the transformation process where input are
converted to output), and produces the Output (the products/services). The Output
are then marketed to the customers (in case of goods) or experienced by the
customers (in case of services). Customers satisfaction level, profits generated,
and the performance of people from the transaction are the Outcomes of the EDs
 Input Throughput Output Marketing Desired
Outcomes
- Harnessing - Conversion of - Goods - Positioning - Customers
of human, input into produced or - Product satisfied
money and output and the services - Packaging - Sales volume
physical transformation delivered - Place attained
resources process within - People - Profits
the factory or - Promotion generated
- Resources service shop - Price - - People
mobilized performance

- Money
- Men
- Machines
- Materials
- Methods
- management
 These resources become the input (money, men, machines, materials, methods and
management) which the Operations unit within the EDs (i.e., the manufacturing or service
delivery personnel) will convert or transform into output.

The output will then be delivered to the customers through the Marketing unit of the EDs.
The product/services of the enterprise are positioned to meet the requirements of the
selected market segment by choosing the right packaging, pricing, promotions, people for
selling and distribution, and places or locations where the targeted customers can best be
found.

The EDs serves as the enabler of the Enterprise Strategy. The business plan must
demonstrate how the EDS and the ES tandem lead to attainment of the desire enterprise
outcomes.

These business outcomes should reasonably include:

• High customer satisfaction level;
• High sales volume, market share, and market reach ;
• High financial returns; and
• High people performance, productivity, and morale levels.
VIII. The Financial Forecasts and Expected
Returns, Risks, and Contingencies
XI. Environmental and Regulatory
Compliance
FINALCIAL FORECAST: EXPECTED RETURNS, RISKS, AND CONTINGENCIES
From the financial forecast, the business plan should then calculate the expected
returns from the business. The important return calculations are the following: (1)
expected return on sales; (2) expected return on assets or investments; and (3)
expected return on stockholders’ equity.

The business plan should also calculate long term returns, using the time value of
money. This means estimating the internal rate of return and the expected net
present value.

The business plan should then evaluate both the business risks and the financial
risk involved.
ENVIRONMENTAL AND REGULATORY COMPLIANCE

The business plan must articulate the laws, rules, and regulations governing
the business, and the industry that the enterprise is in. it should ascertain
that all the necessary permits, licenses, and authority to use proprietary
intellectual capital had either been secured or would definitely be secured.

The business plan should also assure the reader that all the necessary local
government ordinances and barangay ethics would be followed by the
enterprise.
X. The Capital Structure and Financial
Offering: Returns and Benefits to Investors,
Financiers, and Business Partners
CAPITAL STRUCTURE AND FINANCIAL OFFERING: RETURNS AND
BENEFITS TO INVESTORS, FINANCIERS, AND PARTNERS

Finally, the business plan must appeal to its target

audience. It must highlight for them the main
features of the business plan that they are looking
for.