ENTREPRENEURSHIP &

INNOVATION

Chapter 9
Business Models And Planning - How Business Models
Can Be Used To Determine The Feasibility Of The New
Venture, How They Evolve, And What Elements Are
Critical In Business Plans
Learning
Outcomes
To elaborate on the “Business
Model” concept
To understand the concept
“Business Plan.”
To understand the importance
of a business plan
To elaborate on the element and
steps in producing a business
plan
Business Model
Every businesses develops a profit-generating strategy
They develop a model for finding products and services to offer, as well as
the market they wish to target and estimated costs
A company's business model is how it sells things to its clients.
It explains how a company generates, distributes, and captures value.
It's a visual representation of a company's fundamental elements, such as
its mission, products, strategies, infrastructure, organizational structures,
trade practices, and operational processes and policies.
Types of Business Model
Business-to-Business (B2B)
Business-to-Consumer (B2C)
Consumer-to-Consumer (C2C)
Consumer-to-Business (C2B)
Types of Business Model (Cont'd)
Business-to-Business (B2B)
The collaboration of two or more corporate groups
It comprises business interaction between organizations using the
Internet as a medium.

Business-to-Customer(B2C)
A model that refers to companies who offer their services or
products directly to the end users of the goods or services.
This strategy allows customers to shop, choose, and purchase
goods online from a greater range of suppliers at lower prices.
Types of Business Model (Cont'd)
Consumer-to Business (C2B)
Individuals (consumers) produce value and firms consume it
Customer writes a review or offers a useful suggestion for new product
development

Consumer-to-Consumer (C2C)
An online marketplace links consumers to trade goods and services and
makes money by collecting transaction or listing fees
The online auction is a common example
Importance of Business Model
Gives a business a competitive advantage in the marketplace
Gives the company a positive market reputation, which encourages
investors to keep their money in the company
It leads to increased cash reserves and new investments, as well as
a steady stream of profits.
The business financial stability is enhanced
It helps to identify and create value from innovation
Elements of a Business Model
Value proposition
Market segment
Value chain structure
Revenue generation and margins
Position in value network
Competitive strategy
 Business Plan
What is a Business Plan?
For the entrepreneur, this is a useful tool.
A step-by-step approach for turning a company idea into a
profitable business enterprise is outlined in this blueprint.
A written document that outlines a current or potential business
venture's future activities.
 Business Plan (Cont'd)
What is a Business Plan?
A business plan is a document that contains information on a
company's products and services, as well as information about the
cost, sales, and predicted profits.
It is the formal written representation of the entrepreneurial vision,
defining the prospective venture's strategy and activities.
 Importance of a Business Plan
It help to reduce or eliminate hazards.
It help to reduce production costs.
It reveal flaws in the business operations.
It keep a business from going into a downward spiral.
It forces the individual writing the plan to examine the company
objectively and critically.
 Importance of a Business Plan (Cont'd)
It acts as a feasibility analysis of the business's potential for success and
expansion, as well as a way to focus ideas.
The final report will be used as a tool to define the company's current
state and future prospects.
It can assist you in running your business and preparing you for success.
It establishes your mission, competition, management, and personnel.
 Components of the Business Plan
Executive Summary
Company Description
Management Team
Products or Services
Strategic Plan
Market Analysis
Competitive Analysis
Strategy and Implementation
Financial Information
Exit Plan
Exhibits and Appendices
 Components of the Business Plan (Cont'd)
1. Executive Summary
It is the last topic in your strategy, and it occurs at the start of the
paper
A compelling synopsis that will attract a reader to read further and
take the proposal seriously.
It should encompass everything vital to the person reading it,
whether they are a lender, investor, or financier, as the phrase
summary implies
 Components of the Business Plan (Cont'd)
2. Company Description
Include information on the company's start-up, ownership, and
legal status
A detailed description of your company's objectives, products,
services, and target market
You should also include information about the industry that your
company will serve, as well as any market trends and main rivals.
 Components of the Business Plan (Cont'd)
3. Management Team
What are the qualifications, experience, and past accomplishments of the
founders/founder groups?
How important is the person who came up with the idea to the venture's
future success?
What is the distribution of management tasks among the team members?
Display the management positions, as well as who reports to whom, who
occupies each position, and job descriptions.
 Components of the Business Plan (Cont'd)
4. Products or Services
It is critical to highlight the competitive advantage that a company's
product or service has over the competition
Give an overview of what products and services your business provides,
incorporate facts and extra information as available.
Elaborates on what distinguishes your product or service from others
Patents, trademarks, copyrights, franchises and licensing agreements
 Components of the Business Plan (Cont'd)
5. Strategic Plan
This part should include a description of the – company's high-level
strategies and expected outcomes.
This section discusses your company's vision, mission, values, and
techniques for attaining its goals.
Examine your goals, including what you want to achieve, where you
want to go, and how you want to get there.
Come up with measurable and observable strategic goals.
 Components of the Business Plan (Cont'd)
6. Marketing Analysis
The value proposition that drives the company's performance should be identified in this
section of the plan.
The market analysis is to investigate and determine a company's major target audience,
as well as where to find them.
The following are some of the points to consider in this section:
Geographically, where is your target market?
The main issues that your target clients are having
Your target market's most pressing demands and how your products or services might
solve them
The demographics of your target market, as well as the places where they spend the
majority of their time, such as social media platforms and physical locations
 Components of the Business Plan (Cont'd)
6. Competitive Analysis
The strengths and weaknesses of important rivals should be
described in this analysis.
There are always competitors
Compare features and benefits
Technology comparison
Entire product offering Comparison
Outline your competitors' flaws and strengths, as well as how you
expect your organization to compare.
 Components of the Business Plan (Cont'd)
7. Strategy and Implementation
What are the resources and procedures required to bring the product to
market?
This part should include information about your company's
manufacturing, R&D, purchasing, staffing, equipment, and facilities.
What is the short-term implementation plan in detail
What are the main turning points in your life?
What are the company's long-term possibilities
The Marketing Option
 Components of the Business Plan (Cont'd)
7. Strategy and Implementation (Cont'd)
Segmentation and Positioning of the products/services
Marketing Mix Strategy:
Product Mix Strategy
Promotion Mix Strategy
Pricing Mix Strategy
Distribution Mix Strategy
 Components of the Business Plan (Cont'd)
8. Financial Information
What are the forecasts for the next five years?
Profit and loss statement
Statement of Cash Flow
A method of valuing a company
Analysis of discounted cash flows
Multiples of revenue
 Components of the Business Plan (Cont'd)
8. Financial Information (Cont'd)
A financial statement
What are the financial performance's key assumptions?
What are the business's financial requirements, and what sources of
funding have been identified?
Projected Ratios (Liquidity Ratio: Current Ratio, Acid Test
Ratio, Inventory Turnover Ratio and Debtors & Creditors Turnover
Ratio Other Ratios: ROI, ROA, ROCE, EPS, DPS,
 Components of the Business Plan (Cont'd)
9. Exit Plan
Provide details about how the organisation will be dissolved-
take overs, sales of assets
What will be the share of each stakeholders in case of winding-up of
the organisation
Indication of the risks involved from the investors’ point of view
 Components of the Business Plan (Cont'd)
10. Exhibits and Appendices
Any additional information to support the elements stated in your
business plan

The following is a list of common information to add in this section: