How to Make a

Business Plan
Business Plan defined……
Is a document that aims to establish
whether or not a business idea will bring
money that is that is greater than what it
cost to start and operate it.
 Why make a business plan?
• To reduce, if not remove, the risk of losing money invested in a poorly
researched or unstudied idea.
• To avoid costly mistakes.
• To anticipate your financial requirements.
• Organize your activities beforehand.
• To assess actual performance against set goals.
• Apply for financing from lending institutions.
Components of
a Business Plan
Marketing
Plan
The Marketing Mix
1. Product
2. Price
3. Target Market
4. Place
5. Promotion
 Product
These includes:
• Branding
• Packaging
• Labelling
• Product Support
• Product attributes
 Price
• Some pricing strategies:
1. Cost-plus pricing
Add all the cost incurred in producing product and divide the sum of all
these costs by the number of products made. The result of that division
is the cost per unit that had been made. Then, come up with a
percentage to represent your mark-up that will leave you with some
profit. Add the mark-up to the cost per unit to arrive at the selling price.
To illustrate:
Total cost incurred to make product = PhP 3,000.00
No. of products made = 500 pcs.
Computation of Unit Cost 3,000.00/500 pcs. = PhP 6.00
Markup (30% Assumption) +2.00
SELLING PRICE per product PhP 8.00
• Some pricing strategies:
2. Competition-based pricing
This strategy means that the main factor for determining the price of your
product or service is your competitor’s price. You can set a price either:
Higher than your competitor to establish in your target market’s mind that
your product or service is far more better or more superior and is of
higher value
At the same level to show your market that for the same amount of
money, they can get a better product.
Or lower as an introductory offer and create short-term sales or a long-
term offer to capture the market.
• Some pricing strategies:
2. Demand-oriented pricing
This dynamic approach allows you to set a high price when demand is
strong and a low price when the demand is weak. Demand can be
strong when there is growth in population, when only you or a few
number of businesses are making that type of product, and when the
competitor discontinues making the product.
 Target Market
• Who will buy or use your product/service?
• Illustrating the target customers by:
Geographic – country, region, size of country, climate
Demographic – population, age, gender, sexual orientation, income,
occupation, education, etc.
Psychographic – personality, lifestyle, values, attitudes, or behavioral like
product-benefit sought, rate of usage, brand loyalty, readiness-to-buy stage,
etc.
 Place
• Where are you going to sell your product?
• How the product or service will get into the hands of or be availed by the target
market.
Factors to consider on choosing the location of a business:
 Convenience
 Accessibility
 Potential for generating sales
 Continuous supply of power and water
 Zoning regulations
 Promotion
Promotional Tools Examples
Advertising TV, Radio, Newspapers, magazines, classifieds, yellow pages, billboards

Sales Promotions Sampling, coupons, refund offers, continuity programs, bonus packs, trade
allowances, premiums, in/on/near packs, contests, tradeshows
Public Relations News stories and press releases

Personal Selling Sales force or distributors

Events Marketing Hosting/sponsoring an event

Minimedia Business cards, brochures, banners, newsletters, posters, gift certificates

Internet Company web page, web page ads, viral advertising, chats, blog sites, E-groups

Other promotions Frequently buyer programs, music, jingle, slogans, packaging, special gifts.
Technical
Plan
Should include:
• Plant location
• choosing the place near your source of raw materials,
• close to your labor source,
• where your market is
• Process Description – description of a step-by-step process
from raw material to finished product to your customer.
• Process Flow – an illustration of the process of production
• Property, Plant and Equipment
-should include choosing machineries required for production
considering their operating characteristics, engineering features, cost,
qualitative factors
• Plant Layout
-An illustration showing the complete set-up of your production plant.
• Production Schedule
- Is a schedule of the operation of business in a weekly or yearly basis
and sometimes by batch of production
Organizational
Plan
Legal Form
• Sole Proprietorship – Department of Trade and Industry (DTI)
• Partnership – Securities and Exchange Commission (SEC)
• Corporation - Securities and Exchange Commission (SEC)
• Cooperative – Cooperative Development Authority (CDA)

Staffing your business

• Manpower requirements
-includes the job descriptions and job qualifications for the operation of
the business
-Should also include salaries and wages for employees, upper management
and other manpower requirements
Financial
Plan
What to include in the Financial Plan?
1. Total Project Cost
2. Income Statement
3. Cash Flow Statement
4. Balance Sheet
5. Financial Analysis