DEVELOPING A BUSINESS PLAN
I. Objectives: At the end of the lesson, the students should be able to:
- Explain business planning.
- Enumerate the Principles of planning.
- Differentiate the stages of planning.
- Identify the criteria of an effective business plan.
- List the different components of a business plan.
- Describe the characteristics of a sound business plan.
- Planning must be realistic.
- Planning must be based on felt needs.
- Planning must be flexible.
- Planning must start with simple projects.
- Unplanned stage. At this stage the owner-manager is busy looking for funds, customers, materials and equipment. His entire attention is devoted to the daily operations of his business in his intense desire to survive.
- Budgeting-System stage. The owner-manager realizes the need to develop and use a budgeting system. Estimated incomes from sales and expected expenditures are made. This is done to facilitate the orderly functions of the growing enterprise.
- Annual planning stage. The owner-manager drafts an annual plan. He can use either:
A. Top-down planning –
the owner-manager provides
the goals and let the employees
comply with them.
B. Bottom-up planning –
encourages his employees
to participate in planning
the goals and strategies of
- Strategic Planning Stage. As the business enterprise becomes bigger, a long-range planning is needed. This is a three or five-year plan.
- The plan should state clearly its objectives.
- The plan should provide measures for a satisfactory accomplishment of the objectives in terms of quantity, quality, time and cost.
- The plan should state the policies which should guide people in attaining the objectives.
- The plan should indicate the department or unit will be involved in accomplishing the objectives.
- The plan should indicate the time which should be allowed for each activity.
- The plan should specify the required resources and their corresponding costs.
- The plan should designate the officers who will be held accountable for the accomplishment of the objectives.
- Time frame
- Logical and simple
- Complete and integrated