Chapter 1: Planning the Enterprise
1.1 WHAT IS BUSINESS PLAN FOR?
Entrepreneurs who plan to enter any business endeavour must have a business plan on
hand to guide them throughout the process. Different business plans are prepared for different
purposes. There are business plans written prior to setting up an enterprise, which are similar to a
prefeasibility study and a feasibility study. Many new enterprises need to convince prospective business
investors about the soundness and potential of their business. They need to convey the capabilities and
competencies of their owners and managers. They must also be able to ‘self’ the proponent and the
business proposition to this audience. These are situations when a good business plan is needed.
There are business plans that are written during the first few years of the enterprise in
order to guide the entrepreneur on which the strategies would be most beneficial for the enterprise to
take. And there are business plans that are focused on bringing the enterprise to a higher level of
growth, a period where the enterprise has already reached its peak and would want to enter into
another endeavour by re-creating and re-establishing itself.
Clearly, a business plan serves many masters. First, it serves the entrepreneur who must
set a navigational course. Second, it serves investors and cautious financiers. And third, it serves the
manager and the staff of the organization so that they will know the strategies and programs of the
enterprise.
The business plan must have a specific audience in mind and what important questions
do this audience want answered. In order to aid the entrepreneur in getting his or her business plan
organized, the following format may be a good start:
I. Introduction
A. The Business concept and the Business Model
B. The Business Goals: Vision, Mission, Objectives and Performance Targets
C. The Business Offering and Justification
II. Executive Summary
III. The Business Proponents: Organizers with their capabilities and Contributions
IV. The Target Customers and the Main Value Proposition to the Customer
V. The Market, Market Justification based on the Industry Dynamics and the Macro
Environmental Factors Affecting the Opportunities and Threats in the Market,
the Size, Potential and Realistic Share of the Market.
VI. The Product and Service Offerings
VII. The Enterprise Strategy and Enterprise Delivery Systems: Business Competitiveness
VIII. The Financial Forecasts and Expected Returns, Risks and Contingencies
IX. Environmental and Regulatory Compliance
X. The Capital Structure and Financial Offering: Returns and Benefits to Investors
Financiers, and Business Partners.
1.2 CONTENTS OF A BUSINESS PLAN