Elements of A Business Plan
Elements of A Business Plan
Elements of A Business Plan
COLLEGE OF ARCHITECTURE
GROUP 3:
ELEMENTS OF A BUSINESS PLAN
GROUP MEMBERS:
ANILLO, JOHN
ARANDA, MARIA ANGELICA
BATLAGAN, RONALDO
DELAPAZ, JOHN MAR
ESCOBEDO, KEVIN
INTRODUCTION
A business won’t grow without a clear direction to follow and adhere to. In order to create an
effective strategy, entrepreneurs should come up with a vision of where they want to be, what
they want to achieve, and what level of growth they want to acquire. Once that’s settled, it will
be easier to work their way backwards and determine what steps will bring them towards their
goals.
To identify, describe and analyze a business opportunity and/or a business already under way,
examining its technical, economic and financial feasibility, a business plan is highly essential.
To start off, what is a business plan? A business plan is a document that defines in detail a
company's objectives and how it plans to achieve its goals. It is an important document that can
help the business gain clients and/or investors, especially if it doesn’t have a proven track
record yet.
Outline:
1. Goals and Objectives
2. Provisions for Deliveries
3. Marketing Strategies
4. Management System
5. Financing Scheme
Business goals are an essential part of establishing priorities and setting your company up for
success over a set period of time. Taking the time to set goals for your business and create
individual objectives to help you reach each goal can greatly increase your ability to achieve
those goals.
Goals
Business goals are goals that a business anticipates accomplishing in a set period of time.
Business goals do not have to be specific or have clearly defined actions. Instead, business
goals are broad outcomes that the company wishes to achieve.
Setting business goals are important for several reasons, including that they can:
● Provide a way to measure success
● Keep all employees on the same page as to what the goals of the company are
● Give employees a clear understanding of how decision-making reaches the company's
goals
● Ensure the company is headed in the right direction
Objectives
Business objectives are clearly defined and measurable steps that are taken to meet a
company's broader goals. Objectives are specific in nature and can be easily defined and kept
track of. Companies must establish objectives to achieve their business goals.
1. Identify your company's short-term business goals for a set period of time
2. Break down each goal into actionable business objectives
3. Ensure your objectives are measurable
4. Assign goal-related tasks to employees
5. Measure progress regularly
In addition to the steps mentioned in the section on how to set short-term goals, you should also
include these steps when creating long-term business goals:
1. Establish the goals you want to accomplish over the next 10 years
2. Prioritize your long-term business goals
3. Break down each long-term goal into short-term objectives
4. Track your company's long-term goals regularly
There are some factors that important for the businesses. Taking good control of the delivery
process in order to make sure that the parcel is delivered to the customers on time. It may lead
to the efficiency of businesses can be increased and the amount of time and effort spent can be
reduced in dealing with deliveries.
Here are the four most important sections to include in a business plan:
4. How will you maximize profits, and prepare your business for growth?
One of the biggest expenses of running a delivery business is the time it takes to complete
last-mile deliveries. To alleviate this cost, experienced businesses tend to use a route
management software. Circuit for Teams is one excellent solution for multi-driver businesses;
and Circuit Route Planner is the best option for single-driver operations.
MARKETING STRATEGIES
A marketing strategy refers to a business’s overall game plan for reaching prospective
consumers and turning them into customers of their products or services. A marketing strategy
contains the company’s value proposition, key brand messaging, data on target customer
demographics, and other high-level elements.
1. Product
The product is the good or service being marketed to the target audience.
Generally, successful products fill a need not currently being met in the marketplace or provide a
novel customer experience that creates demand. For example, the original iPhone filled a need
in the market for a simplified device that paired a phone with an iPod, and the chia pet provided
a humorous experience for consumers that was utterly unique.
2. Price
Price is the cost of a product or service.
3. Promotion
Promotion is how you advertise your product or service. Through promotion, you will get the
word out about your product with an effective marketing campaign that resonates with your
target audience.
4. Place
Place is where you sell your product, and the distribution channels you use to get it to your
customer.
Much like price, finding the right place to market and sell your product is a key factor in reaching
your target audience. If you put your product in a place that your target customer doesn’t
visit—whether on or offline— then you will likely not meet your sales target. The right place,
meanwhile, can help you connect with your target audience and set you up for success.
MANAGEMENT SYSTEM
What is the management system section of a business plan? It describes your management
team, staff, resources, and how your business ownership is structured.
The different parts of the management section in a typical business plan are the following:
ownership structure, internal management team, external management, and human resources.
1. Ownership Structure
The ownership structure is the legal structure of an enterprise. This part explains who holds
what percentage or ownership in the business. It can be classified into three categories: sole
proprietorship, partnership, corporation.
Sole proprietorship is business that can be owned and controlled by an individual, a company or
a limited liability partnership. There are no partners in the business. The legal status of a sole
proprietorship can be defined as follows: It is not a separate legal entity from the business
owner.
In this part of the business management section, the number of employees the business will
need at each stage are expounded, as well as the costs for hiring and keeping the staff. It also
answers how will the HR needs be met. It is described what kind of staff the business
needs—employees, contractors, or freelancers and whether they’ll work full-time, part-time, or
mix.
Staffing requirement along with the description of specific skills needed are also laid out in this
section. To be efficient in the business and increase staff productivity, the ratio of each
employee to the number of customers they can serve is looked into and forecasted. Labor costs
are also calculated in this part, including employee salaty, workers’ compensation insurance,
and employee benefits, such as health insurance plans, paid time off, and workers’
compensation insurance.
Lastly, the staff recruitment process and training are also explained in this section in order to
find the right employee for each position.
FINANCING SCHEME
Definition of Financing
According to Investopedia, Financing is the process of providing funds for business activities,
making purchases, or investing. Financial Institutions, such as banks, are in the business of
providing capital to businesses, consumers, and investors to help them achieve their goals. The
use of financing is vital in any economic system, as it allows companies to purchase products
out to their immediate reach.
Financial Statements
The financial data is always included at the end of the business plan, but that doesn't make it
any less significant than the information presented up front, such the management team and the
business concept. Intelligent investors carefully examine the financial section's graphs, tables,
formulas, and spreadsheets because they are aware that this data is comparable to a person's
pulse, respiration rate, and blood pressure in that it indicates whether the patient is still alive and
the possibility that they will continue to live.
Like bad news, financial statements also arrive in threes. Financial statement information isn't
always terrible, of course, but when viewed as a whole, it gives a clear image of a company's
current value as well as its capacity to make a profit now and in the future.
There are three common statements which is cash flow statement, income statement and
balance sheet.
Income Statement
The income statement is a plain report on the potential of the proposed company to generate
cash. It serves as a scorecard for your company's financial success, showing when sales are
produced and when costs are incurred. It uses data from the numerous financial models that
were previously built, including data on income, costs, capital, and the cost of products.
The income statement combines these factors to show how much money your business earns
or loses over the course of the year by deducting cost of goods and costs from revenue to arrive
at a net result, which can be either a profit or a loss.
Income Statement is formed by listing your financial projections in the following manner:
1. Income. Includes all the income generated by the business and its sources.
2. Cost of goods. Includes all the costs related to the sale of products in inventory.
3. Gross profit margin. The difference between revenue and cost of goods. Gross profit
margin can be expressed in dollars, as a percentage, or both. As a percentage, the GP
margin is always stated as a percentage of revenue.
4. Operating expenses. Includes all overhead and labor expenses associated with the
operations of the business.
5. Total expenses. The sum of all overhead and labor expenses required to operate the
business.
6. Net profit. The difference between gross profit margin and total expenses, the net
income depicts the business's debt and capital capabilities.
7. Depreciation. Reflects the decrease in value of capital assets used to generate income.
Also used as the basis for a tax deduction and an indicator of the flow of money into new
capital.
8. Net profit before interest. The difference between net profit and depreciation.
9. Interest. Includes all interest derived from debts, both short-term and long-term. Interest
is determined by the amount of investment within the company.
10. Net profit before taxes. The difference between net profit before interest and interest.
11. Taxes. Includes all taxes on the business.
12. Profit after taxes. The difference between net profit before taxes and the taxes accrued.
Profit after taxes is the bottom line for any company.
The income statement is the next financial statement everyone should look at. It looks quite
different from the balance sheet. In the income statement, it’s about the revenue and the
expenses.
Source: Colgate SEC Filings
● Well, it starts with the gross sales or revenue. Then we deduct any sales return or sales
discount from the gross sales to get the net sales. This net sale is what we use for ratio
analysis.
● We deduct the costs of goods sold from net sales, and we get the gross profit.
● We deduct the operating expenses from gross profit, like the expenses required for daily
administrative expenses. We get the EBIT, meaning the earnings before interest and
taxes, by deducting the operating expenses.
● From EBIT, we deduct the interest charges paid or add interest received (if any), and we
get EBT, meaning earnings before taxes.
● From EBT, we deduct the income taxes for the period, and we get the Net Income
meaning profit after tax.
● Cash Flow from Operations is the cash generated from the business’s core operations.
● Cash Flow from Investing Activities relates to the cash inflows and outflows related to
investments in the company like buying property, plants, and equipment or other
investments.
● Cash Flow from Financing Activities relates to the cash inflows or outflows related to the
debt or equity of the company. It includes raising debt or equity, loan repayments,
buyback of shares, etc.
Balance Sheet
The balance sheet is a financial statement that provides a snapshot of the assets, liabilities, and
shareholder’s equity. Many companies use the shareholders’ equity as a separate financial
statement. But usually, it comes with the balance sheet.
The equation that you need to remember when you prepare a balance sheet is this –
Assets = Liabilities + Shareholders Equity
The balance sheet sometimes gets quite complex. The accountants need to make sure that
every record is properly reported so that the total assets always equal total liabilities plus
shareholders’ equity.
REFERENCES:
Financing Scheme. Law Insider. https://www.lawinsider.com/dictionary/financing-scheme
Ward, S. (2022). How To Write the Management Section of a Business Plan. The Balance SMB.
https://www.thebalancesmb.com/management-section-of-business-plan-2947028
Klose, D. (2022). 4 Key Things to Include in Your Delivery Service Business Plan. Circuit Blog.
https://getcircuit.com/teams/blog/delivery-service-business-plan