Limitations of Drawing a Business Plan

Business concern Plan

A Business Plan is a blueprint of the step by pace process that would be followed in order to catechumen a business idea into a successful business venture. It involves the following tasks –

• Identifying business opportunities and an innovative idea
• Researching the external environment for opportunities and threats
• Identifying internal strengths and weaknesses
• Assessing the feasibility of that idea and
• Allocating resources in the best possible manner

Objectives of a Business organisation Program

• To give direction to the vision of Entrepreneur
• To objectively evaluate the futurity prospects of the business organisation
• To monitor the progress after implementation of the plan
• To seek loans from Financial Institutions
• To facilitate the decision making process
• To persuade others to join the business
• To identify strengths and weaknesses present in the internal environment
• To identify opportunities and threats in the external environment
• To appraise the feasibility of the concern

Preparation of a Business Plan

A good business plan must identify strengths and weaknesses internal to the business and the challenges in terms of opportunities and threats to assess the viability of the business. Information technology must lay downward all the necessary steps that are involved in initiating and operating a proposed business organization. Preparation of a business plan involves the following steps :-

(I) Preliminary Investigation – In order to create an effective plan an entrepreneur must –

•  Review available business plans
• Depict fundamental business assumptions on which plan is based
• Scan the environment for Strengths, Weaknesses, Opportunities and Threats
• Seek professional advice
• Bear a functional audit

(II)Idea Generation – It involves generation of a new concept/product/service or value improver to an existing Product or Service. The idea must be such that satisfies the existing demands and future demands of market.

Sources of ideas –

•  Consumers
• Existing companies
• Research & Development
• employees
• Dealers/Retailers

Methods of generating ideas –

•  Brain storming
• Group discussion
• Data collection through questionnaires
• Invitation of ideas from professionals
• Value addition to existing Product and Service
• Market place research
• Import of ideas from products launched abroad
• Commercializing inventions

Screening of ideas is done to identify practical ones and eliminate impractical one. The most feasible and the most promising thought is selected for farther investigation.

(III) Environs Scanning – The internal and external environment must be analysed to study the prospective strengths, weaknesses, opportunities and threats of the business. An entrepreneur must collect data from all formal and informal sources in club to understand the supportive and obstructive factors related to the business concern enterprise.

External Surround –

• Socio cultural appraisal – It involves assessment of the values, beliefs and norms of a detail society in gild to understand their perception towards a particular idea or product.

• Technological appraisal – It involves cess of existing technical know-how and availability of technology necessary to convert an thought into a production.

• Economic appraisal – It assess the economic environment in terms consumer price index, aggrandizement, balance of payments, consumption blueprint, per capita income etc.

• Demographic – It involves an assessment of the overall population blueprint of a particular region. Variables similar age, education, income pattern, sexual activity, occupation, distribution etc. help in identifying the size of target market place.

• Government appraisal- It appraise various grants, legislations, policies, incentives, subsidies etc. formed by regime.

Internal Environment –

• Availability of Raw materials
• Availability of various machines, tools and equipment required for product
• Means of Finance and cess of opening, maintaining and operating expenses
• Assessment of Nowadays, Potential and Hereafter marketplace
• Cess of price, quantity and quality of homo resources required

(4) Feasibility analysis –   Feasibility analysis is done to find out whether the proposed project volition be viable or not. The various variables that are studied include –

(a) Marketplace Analysis – It is conducted to –

•  Estimate the demand of the proposed product in the future
• Estimate the marketplace share of the proposed product in the time to come

(b) Technical or operational assay – Information technology is conducted to access the operational ability of the proposed business. It is very important to find out the cost and availability of technology. Under Technical assay data is collected on post-obit parameters –

•  Textile availability
• Material requirement planning
• Establish location
• Plant chapters
• Machinery and Equipment
• Institute layout

(C) Financial analysis – A Financial Feasibility test is carried out to access the financial issues related with the proposed concern. The following estimates have to be carried out –

• Price of land and building
• Cost of found and machinery
• Preliminary cost interpretation
• Provision for contingencies
• Working capital estimates
• Cost of production
• Sales and production estimates

Based on the to a higher place assay the following projections are made –

• Interruption-even indicate
• Cash flow statement
• Balance canvass

(Five) Drawing functional plans – If the feasibility plans give a positive indication a draft concern plan is formulated. It involves preparation of the following functional plans –

(a) Marketing Plan – A marketing plan lays down strategies for marketing a product/service which can lead to success of business. These strategies are fabricated in terms of marketing mix (4 P'southward) i.e. Production, Price, Identify and Promotion.

(b) Production/Operation Plan –A production programme is fabricated for a concern involved in manufacturing manufacture while an functioning plan is made for business involved in service industry. Information technology includes strategies for following –

• Location and reasons for selecting a location
• Physical layout
• Cost and availability of equipment, machine and raw textile
• List of suppliers and distributors
• Cost of manufacturing and running operations
• Quality management
• Product scheduling capacity and Inventory management

(c) Organizational Plan – It defines the type of ownership i.e. information technology could exist a single proprietary, partnership firm, visitor, private limited or public limited. It also consists of details about the organization construction and norms guiding the arrangement civilisation.

(d) Financial Plan – Information technology indicates the financial requirement of the proposed business and furnishes the post-obit details –

• Cost incurred in smooth running of all the financial plans
• Projected cash flows
• Projected income statement
• Projected Break even point
• Projected ratios
• Projected remainder canvass

(east) Human Resource Programme – It consists of the details on the following:-

• Manpower requirements
• Recruitment and Selection
• Compensation
• Organisation structure
• Wages and Salaries
• Budget
• Remuneration etc.

(VI) Project Report Training – Information technology is a written document that describes pace by step, the strategies involved in starting and operating a business. Information technology is prepared when environmental scanning has been done and feasibility studies have been carried out.

(Vii) Evaluation, Review and Control – In society to keep up with the dynamic environment and  successfully confront global contest a business must be continuously evaluated and reviewed. It is necessary to periodically evaluate, control and review a business to keep up with the technological changes and introduce changes in the concern strategy.

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