Business Plan &

Proposal Writing

Dr.G.Indhumathi, Assistant Professor,

Department of Commerce,
Mother Teresa Womens University,
Kodaikanal
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Introduction
From

the conception of a
business idea upto production
What is a business plan?
How to make a right business
plan?

Business Plan
It

is a written statement of what

an entrepreneur proposes to take
up
It is a kind of guide frost or course
of action what the entrepreneur
hopes to achieve in his business and
how is he going to achieve it
It serves like a kind of big road
map to reach the destination
determined by the entrepreneur
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Definition
Webster

New 20th Century Dictionary defines

a project as a scheme, design, a
proposal of something intended or
devised.
According to Jack M. Kaplan The term
business plan means the development of
a written document that spells out like a
roadmap where you are, where you want
to be, and how you want to get there.
A business plan or project report can best be
defined as a well evolved course of action
devised to achieve the specified
objective, i.e. setting up a small
business enterprise within a specified
period of time.
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Contents of Business Plan

(Contd.)
1.
2.
3.
4.
5.
6.
7.
8.
9.

General Information Product

Promoter Qualification, Experience
Location Locational advantage
Land and Building Area, Cost of
construction, Plant layout
Plant and Machinery Required machinery,
Cost, Suppliers
Production process Process chart, Available
technology
Utilities Water, Power, Air requirements,
Sources of utilities
Transport and Communication Mode, Cost
Raw material Quality, Quantity, Source,
Cost
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Contents of Business
Plan
Man power Skilled, Semi skilled, Source, Cost,
10.

Requirement of Training
11. Products Estimated sales, Distribution channel,
Competition, Pdt. Standard, Substitute
12. Market End-users, Distribution of Mkt. (Local,
National, Inter.), Trade practice, Sales Promotion
13. Requirement of working capital
Requirement, Source, Nature of credit facility
offered and available
14. Requirement of funds Breakup of project cost
15. Cost of production and Profitability of 10 yrs
16. Break-even analysis
17. Schedule of Implementation
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Significance of
Business Plan
An

Objective without a plan is

just a Dream
Business plan is like a Road map.
It describes the direction the
enterprise is going in, what its goals
are, where it wants to be, & how it is
going to get there.
Business

plan is to attract
lenders and investors
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Formulation of Business
Plan Stages (Contd.)
1. General information

Bio-data of Promoter
Industry profile
Constitution and Organization
Product details

2. Project description

Site
Physical infrastructure
Raw material
Skilled labour

Utilities
Power
Fuel
Water

Formulation of Business
Plan Stages (Contd.)

Pollution control
Communication system
Transport facilities
Other common facilities machine shops,
welding shops, electrical repair shops
Production process Period of process
Machinery and Equipment Type, size,
cost
Capacity of the Plant
Technology selected
Research and Development
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Formulation of Business
Plan Stages (Contd.)
3. Market potential

Demand and Supply position

Expected price
Marketing strategy
After sales service
Transportation own or public transport

4. Capital costs and Sources of finance

Land and buildings
Plant and Machinery
Installation costs
Preliminary expenses
Margin for working capital
Sources of Finance
Owners funds
Funds from financial institutions and banks

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Formulation of Business
Plan Stages (Contd.)
5. Assessment of working capital
requirements
6. Other Financial aspects

Projected P&L A/c

Projected Balance Sheet
Projected Cash flow statement
Break-even Analysis Sales level at which no
profit / loss

7. Economic and Social variables Social

responsibility

Costs for controlling the environmental

damage
Arrangements made for treating the effluents
and emissions
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Formulation of Business
Plan Stages (Contd.)
Socio-Economic benefits:
Employment generation
Import substitution
Exports
Local resource utilization
Development of the area

8. Project implementation
Draw implementation time-table for
timely completion of all activities of
the enterprise
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Guidelines for
formulating Project
General information
Report
Preliminary

analysis and alternatives

Project description
Marketing plan
Capital requirements and Costs
Operating requirements and Costs
Financial analysis
Economic analysis
Miscellaneous aspects
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Errors in Business Plan

Formulation (Contd.)
Product

selection market and demand

for the product, competitive position,
availability of labour, raw material and
technology and lifecycle
Capacity utilization estimates over
optimistic estimates of capacity utilization,
ignore present enterprise performance,
prevailing market condition, competitive
atmosphere, technical difficulties
Market study vague ideas, insufficient
information, scattered information on
demand and supply of their proposed
product
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Errors in Business Plan

Formulation
Technology

selection technology
depends on the nature of the product,
absence of technology leads to failure
Location selection (i) influenced by
the Govt. offer of financial incentives
and concession (ii) select home town or
ancestral place - leads to wrong
selection for availability of raw material
and labour
Selection of Ownership form
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