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Sunday, July 28, 2013

BUSINESS PLAN



The business plan which you create will require information specific to your industry and your company and should be based on real market information and your best-estimate projections.

What is a business plan?

A business plan is the written document details the proposed venture. It must describe current status, expected needs, and projected results of the new business.

The aspect that needs to be covered: the project, marketing, research, essential critical factors to the business success of planned undertaking. It formulates realistic goals, commitment, milestones, and flexibility. It shows where the business to go with the entrepreneur’s roadmap for a successful enterprise.

Realistic goals explained the specific, measurable, and set within time parameters to reach business goals. Commitment from the supportive networks which including employees and team members. Milestones well structured the subgoals achievement and the continuity. Flexibility by means of obstacles must be anticipated, and alternative strategies are well formulated.

What are the objectives of business plan?

1. Set specific objectives for managers. Good management requires setting specific objectives and then tracking and following up. I'm surprised how many existing businesses manage without a plan. How do they establish what's supposed to happen? In truth, you're really just taking a short cut and planning in your head--and good for you if you can do it--but as your business grows you want to organize and plan better, and communicate the priorities better. Be strategic. Develop a plan; don't just wing it.
2. Share your strategy, priorities and specific action points with your spouse, partner or significant other. Your business life goes by so quickly: a rush of answering phone calls, putting out fires, etc. Don't the other people in your business life need to know what's supposed to be happening? Don't you want them to know?
3. Deal with displacement. Displacement is probably by far the most important practical business concept you've never heard of. It goes like this: "Whatever you do is something else you don't do." Displacement lives at the heart of all small-business strategy. At least most people have never heard of it.
4. Decide whether or not to rent new space. Rent is a new obligation, usually a fixed cost. Do your growth prospects and plans justify taking on this increased fixed cost? Shouldn't that be in your business plan?
5. Hire new people. This is another new obligation (a fixed cost) that increases your risk. How will new people help your business grow and prosper? What exactly are they supposed to be doing? The rationale for hiring should be in your business plan.
6. Decide whether you need new assets, how many, and whether to buy or lease them. Use your business plan to help decide what's going to happen in the long term, which should be an important input to the classic make vs. buy. How long will this important purchase last in your plan?
7. Share and explain business objectives with your management team, employees and new hires. Make selected portions of your business plan part of your new employee training.
8. Develop new business alliances. Use your plan to set targets for new alliances, and selected portions of your plan to communicate with those alliances.
9.  Deal with professionals. Share selected highlights or your plans with your attorneys and accountants, and, if this is relevant to you, consultants.
10. Sell your business. Usually the business plan is a very important part of selling the business. Help buyers understand what you have, what it's worth and why they want it.
11. Valuation of the business for formal transactions related to divorce, inheritance, estate planning and tax issues. Valuation is the term for establishing how much your business is worth. Usually that takes a business plan, as well as a professional with experience. The plan tells the valuation expert what your business is doing, when, why and how much that will cost and how much it will produce.
12. Create a new business. Use a plan to establish the right steps to starting a new business, including what you need to do, what resources will be required, and what you expect to happen.
13. Seek investment for a business, whether it's a startup or not. Investors need to see a business plan before they decide whether or not to invest. They'll expect the plan to cover all the main points.
14. Back up a business loan application. Like investors, lenders want to see the plan and will expect the plan to cover the main points.
15. Grow your existing business. Establish strategy and allocate resources according to strategic priority. You can find more information about growing your business with a business plan by reading " Existing Companies Need Planning, Too ."

STEPS IN MAKING BUSINESS PLAN

BUSINESS PLAN STEP 1:
Determine the purpose of your business. Identify it on paper and go into as much detail as you can at this point. For instance, are you providing a service to the community? Perhaps you are selling a product. Write down what you want the focus to be.
BUSINESS PLAN STEP 2:
Who is your target consumer? Will it be men or women? Old or young? Individuals or businesses and corporations? Local consumers or long distance consumers? All of these are very important to know before proceeding to the next step.
BUSINESS PLAN STEP 3:
Decide how to market to your target consumer. Will you use the Internet? Newspapers? Maybe you will make packets to deliver to local businesses and corporations in an effort to gain their business.
You will need a clear understanding at this step of the purpose of your business and your target consumer. For instance, you will most likely not need to place a newspaper ad if you are providing corporate services, and you will probably not need a business packet if you are advertising to the general public.
BUSINESS PLAN STEP 4:
Where will your business be based out of? Will you work from home, or do you need a location? Obviously if you are running a store, you will need a store front. Location is key, so start researching now how much rents are in your desired location. You would want a high traffic, or easily accessible area for a store.
Perhaps you are just selling stuff online, in which case you don't need a store, but either enough space in your home if you have inventory or a storage unit.
If you are a service provider, you may or may not need a location outside of your home. These are all questions you need to answer to define your business structure.
BUSINESS PLAN STEP 5:
What kind of tangible items will you need to get your business started? Do you need inventory? You will most likely need an assortment of office supplies no matter what your business. Items such as a computer, printer, fax machine are all typical office needs in todays society.
Do you need equipment? This is a good time to research what you may need in the way of equipment for your business. Make a detailed list so you can easily research costs for each.
BUSINESS PLAN STEP 6:
Create a chart to calculate costs. This is the step you perform all the research and write down the costs of everything in the above steps. Don't just guess, but do some actual research. This will include making telephone calls and doing internet searches as well. Creating a list will give you a good idea of what finances you will require in order to get started. Once you have that number calculated, add an additional 10% for incidentals.
BUSINESS PLAN STEP 7:
Draft your "Action Step" list. At this step, while looking over the first 6 steps, create your "Action Step" list, or your "To Do" list. This will and should be extensive. There are many things to do when starting a business.
Once you have completed all seven steps, you are ready to move on. You may want to consider hiring a professional business plan writer, or at the very least, you may want to take a class in business plan writing.
Other things to consider are consulting an attorney to answer your legal questions. Do you need a license? Should you incorporate?
You should also visit an accountant who specializes in small businesses. He or she can give you great financial advice before you get started so you are aware of all the financial aspects and repurcusions of starting a business.
In any event, it is possible to start your own business. Just be sure to do it right, do your research and stay motivated!

WHY BUSINESS PLAN FAIL

The plan is constructed around strategies that are defined inaccurately.

The plan, while substantial, cannot be described clearly by management.

The plan lacks detailed information about job responsibilities and operating schedules.

The plan does not state goals and objectives lucidly and in professional terms.

The plan is incomplete.

Benefits of a Business Plan

The entire business planning process forces the entrepreneur to analyze all aspects of the venture and to prepare the effective strategy to deal with uncertainties that arise.

1. The time, effort, research, and discipline needed to put together a formal business plan force the entrepreneur to view the venture critically and objectively.

2. The competitive, economic, and financial analysis included in the business plan subject the entrepreneur to close scrutiny of the assumptions made about venture’s success.

3. Since all aspects of the business venture must be addressed in the plan the entrepreneur develops and examines operating strategies and expected results for outside evaluators.

4. Drives an entrepreneur using the right communication tools for outside financial resources which needs standard preparation of business plan.

5. An effective business plan provides true information in getting more investors. Investors will delve into the pro forma statement details provided for their decision making in pursuing their investment into the proposed business e.g. bank, financier, institution, individual, etc.

6. Pro forma statements written reflected the actual adequate return on equity and the service-to-debt as well.

7. Critical risks factor comprehensively handle through risks management written in business plan also as great tools for investors to determine an entrepreneur is ready to face contingencies and the unprecedented financial risks.

8. A comprehensive and concise overview on the entire business operation gives true and through business financial evaluation.

9. Well explained the continuous plenty opportunities building in business operation: planning, organizing, departmental, and control. Obviously gives proves the quality management and production.


The role and relevance of entrepreneurial development programme in India


The role and relevance of entrepreneurial development programme in India
 
Role and relevance of Entrepreneurial Development Programme (EDP) in the process of economic development and growth of a nation is immense. Various EDPs are designed to develop and improve entrepreneurial skills and behavioural adjustment needed to go through the stresses of initial stages. Different programmes are designed for different trades, industries and big projects.
Basically the EDPs are meant to train and develop new entrepreneurs who act as catalytic agents in the process of industrialization and economic growth. It is the entrepreneur who organises and puts to use capital, labour and technology in the best possible manner for the setting up of his enterprise. The entrepreneur with his vision and ability to bear risk can transform the economic scene of the country. They play a vital role in initiating and sustaining the process of economic development of a nation. It is the EDP through which the entrepreneurs learn the required knowledge and skill for running the enterprise successfully which ultimately contribute towards economic progress in the following ways:
i. Creates employment opportunities:
Acute unemployment has been a chronic problem of most of the underdeveloped an developing nations of the world. EDPs help solving the problem of unemployment by creating adequate employment opportunities in setting up of their own small and big industrial unit where the unemployed are absorbed.
EDPs also help the unemployed to opt for se employment by choosing entrepreneurship as a career. In this way EDPs help the entrepreneur to get an opportunity to lead on independent and respectable life in the society and at the same time enable others to get gainful employment. Various programmes, schemes like Prim Minister's Rozgar Yojana, NREP (National Rural Employment Programme) and IR (Integrated Rural Development Programme) etc. have been initiated by Government of In to eliminate poverty and solve the problem of unemployment.
ii. Helps in achieving Balanced Regional Development:
Successful EDPs assist in accelerating the pace of industrialisation in the backward areas and helps in reducing the concentration of economic power in the hands of a individual. Government encourages to set up industries in the backward areas to remove wide gap of income and wealth between the rich and poor. The various concessions subsidies offered by the State and Central Governments prompted the entrepreneurs to up their own small and medium industrial units in the rural and backward areas. EDPs in setting up more and more industrial units in the backward areas lead to the develop of rural sector which helps in achieving balanced regional development.
iii. Prevents Industrial Slums:
The towns and cities are highly congested and overcrowding due to the growth of industrial slums which results in overburdening of civic amenities and a lot of problems including adverse impact on the health of the people. EDPs help in solving the above problems by preventing the growth of industrial slums through dispersal of industrial units in different parts of the country including backward and rural areas. EDPs help entrepreneurs to know about the various schemes, incentives, subsides and infrastructural requirements for setting  their enterprises, particularly in backward and rural areas. This checks migration of rural people to urban sector and thus controls the growth of industrial slums.
iv.Use of Local Resources:
Plenty of locally available resources remain unutilized due to absence of initiative and lack of adequate knowledge by the entrepreneurs. Proper use of these resources will help to starve out a healthy base for rapid industrialisation and sound economic growth. EDPs can help in the proper use of locally available resources by providing proper training, guidance and education to the potential entrepreneurs.
v. Easing social tension:
EDPs help in channelizing on right lines the talent and energies of unemployed youth »1io feel frustrated after completing their education without a job or source of livelihood. Unemployment and frustration amongst the young and educated people lead to social unrest Lid tension. EDPs help in diverting the talent of the youth towards self-employment careers by establishing their own enterprises and thus creating employment opportunities for the unemployed. In this way EDPs are able to defuse the social tension and unrest among the youth.
vi. Economic Independence:
The entrepreneurs through EDPs are able to achieve economic independence of a country by producing a wide variety of better quality goods and services at competitive prices. They also through export promotion and import substitution able to earn and save urge amount of foreign exchange which is essential for the growth and development of any economy.
vii. Improves the standard of living and per-capita income:
EDPs provide the necessary support to entrepreneurs by educating them about the test innovation and techniques of production to produce a large variety of quality goods id services at competitive prices. EDPs also help in establishing more enterprises which ad to provide more employment opportunities and help in increasing the earning of the people. It will result in increase in per-capita income and thus helps in the improvement of standard of living of the people.
viii. Helps in the overall development of the nation:
Entrepreneur acts as a catalyst which helps in enhancing the various activities involved a business enterprise. In recent years EDP package, have become a vital strategy for harnessing the vast untapped human skills, and put them into industrial development. It results in the emergence of entrepreneurial opportunities in various fields which leads to all-around development in a country

PROMOTION OF ENTREPRENEURSHIP



PROMOTION OF ENTREPRENEURSHIP

Entrepreneurship  was potential to support economic growth and social cohesion, it is the policy goal of many governments to develop a culture of entrepreneurial thinking. This can be done in a number of ways: by integrating entrepreneurship into education systems, legislating to encourage risk-taking, and national campaigns
Many of these initiatives have been brought together under the umbrella of Global Entrepreneurship Week, a worldwide celebration and promotion of youth entrepreneurship, which started in 2008.
FINANCIAL ASSISTANCE
Financial assistance is available from institutions such as Nationalized Banks, Small Industries Development Bank of India, Regional Rural Banks, National Small Industries Corporation, State Financial Corporations etc. depending upon the project requirement and promoters background. Financial assistance has two components. Loan for fixed capital is used to acquire Plant and Machinery, land and building. Working capital loan is used to meet day to day operational cost of the production. State Financial Corporation and National Small Industries Corporation generally provide working capital. However under a package assistance, State Financial Corporations also provide a composite loan covering plant and machinery and working capital.
The general conditions for getting financial assistance are:
  • Eligibility criteria
  • Technical /Economic viability
  • Promoters contribution
  • Capacity to repay loan
  • Collateral securities/guarantee

CONTRIBUTIONS OF ENTREPRENEURS



CONTRIBUTIONS OF ENTREPRENEURS
1) Develop new markets.
Under the modern concept of marketing, markets are people who are willing and able to satisfy their needs. In Economics, this is called effective demand. Entrepreneurs are resourceful and creative. They can create customers or buyers. This makes entrepreneurs different from ordinary businessmen who only perform traditional functions of management like planning, organization, and coordination.
2) Discover New Sources Of Materials.
Entrepreneurs are never satisfied with traditional or existing sources of materials. Due to their innovative nature, they persist on discovering new sources of materials to improve their enterprises. In business, those who can develop new sources of materials enjoy a comparative advantage in terms of supply, cost and quality.
3) Mobilize Capital Resources.
Entrepreneurs are the organizers and coordinators of the major factors of production, such as land labor and capital. They properly mix these factors of production to create goods and service. Capital resources, from a layman's view, refer to money. However, in economics, capital resources represent machines, buildings, and other physical productive resources. Entrepreneurs have initiative and self-confidence in accumulating and mobilizing capital resources for new business or business expansion.
4) Introduce new technologies.
Aside from being innovators and reasonable risk-takers, entrepreneurs take advantage of business opportunities, and transform these into profits. So, they introduce something new or something different. Such entrepreneurial spirit has greatly contributed to the modernization of economies. Every year, there are new technologies and new products. All of these are intended to satisfy human needs in a more convenient and pleasant way.
5)  Create Employment.
The biggest employer is the private business sector. Millions of jobs are provided by the factories, service industries, agricultural enterprises, and the numerous small-scale businesses

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