Sem-5^TH

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BY – ER.P.PRUSTY

(Lect. In the civil engineering department)

AY:2021-2022

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CHAPTER/MODULE – Business Plan

SUB- EMST

BUSINESS PLAN

Ch – 02 – Market Survey

BUSINESS PLAN

• A written document that outlines the future activity for an

existing or proposed business venture.

• Is the formal written expression of the entrepreneurial vision, describing the strategy and operations of the proposed venture.
• A business plan is a document that brings together the key elements of a business that include details about the products and services, the cost, sales and expected profits.
• Blue Print

Purpose of a Business Plan

• Alignment of team(s)
• Operating plan
• Communication across company, division, department, business partners
• Investment capital
• Expansion capital (banks, leases)
• Merger/acquisition process

BUSINESS PLAN Drivers

What Investors Look For

• How does the team think?
• How detail oriented is the team?
• How big is this market?
• Is there sustainable competitive advantage?
• What’s the growth plan?
• What does the technology roadmap look like, short term or long term play

Financial Projections

• Build 5 years
• Detail near years, extrapolate out years
• Build from single unit economics
• Document assumptions
• Compare against top down
• Validate with market comparables

Must Answer Questions

• How large is your addressable market?
• How fast is the market growing?
• Who’s make up your management team?
• What’s your “secret sauce?”
• What are the barriers to entry/competitive advantage?
• What do your 5 year financials look like?
• What’s your path to profitability?
• Why is this a company versus a product/service?
• Who’s your competition and how do you beat them?

Creating Your Company’s Strategy

• Building a strategy is harder work than building your product
• Think about
• What do you want your business to be when it grows up
• Looking back from 5 years in future
• Perspectives of all stakeholders
• Anything that could go wrong
• Hope is not a strategy

Competitive Analysis

• You always have competitors
• Dig deep, be detailed, be honest
• Compare features and benefits
• Technology comparison
• Whole product offering (pricing, support, etc.)
• Channels, funding, customers…

Sustainable Competitive Advantage

• Create barriers to entry
• Continually add value for your customers (and your investors)
• Anticipate competition and make plans for dealing with it

– Better widget, price erosion, market share, different business model…..

• Avoid the trap of believing that your main competitor is your exit strategy

Format of Business Plan

• TITLE PAGE
• Name of the business
• Owner /Owners
• Contact Details (Addresses, Phone & email etc)
• EXECUTIVE SUMARY

• Business ideas & Goals
• Marketing
• Operations
• Finances

: Over view of business

: Products & services being sold?

: Business Location & staff

: Breakeven period, finance required.

Format of Business Plan

• BACKGROUND
• Mission Statement
• Company history ( existing business)
• Business Goals (Short term/Long term)
• MARKETING
• Market Research
• Market Analysis (Industry / Seasonality /Competitors /SWOT )
• Marketing Plan (Target market/ distribution channel /pricing)
• Evaluation of Marketing

Format of Business Plan

• OPERATIONS & PRODUCTION
• Legal & Licensing requirements
• Management details
• Organization structure & staffing
• Insurance & Security needs
• FINANCIAL PROJECTIONS
• Income & Expenses
• Financial forecasts
• Budget
• IMPLEMENTATION TIME TABLE
• Time needed to set up & run the business

S S I UNITS

Small scale industries are those industries in which the manufacturing, production and rendering of services are done on a small or micro scale. These industries make a one-time investment in machinery, plants, and industries, but it does not exceed Rs 1 Crore. In the next slides the following points will be discussed.

• Introduction of SSI
• Characteristics of SSI
• Role in the Indian economy
• Objectives of SSI

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Introduction of SS I

The small scale industries are generally comprised of those industries which manufacture, produce and render services with the help of small machines and less manpower. These enterprises must fall under the guidelines, set by the Government of India or State Governments..

The SSI’s are the lifeline of the economy, for a country like India. These industries are generally labour-intensive, and hence they play an important role in the creation of employment. SSI’s are a crucial sector of the economy both from a financial and social point of view, as they help with the per capita income and resource utilisation in the economy.

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Examples of SSI�

Fabrication Data Entry

Food processing Sea food processing

Bakeries Packaging

Office stationeries Motor workshop

Water bottles Furniture Manufacturing

Leather Goods Printing press

Small toys Gift item manufacturing Paper Bags Flour / Oil mill

Photography Utensil manufacturing

Beauty parlour IT Related services

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Characteristics of SSI�

Ownership: SSI ’s generally are under single ownership. So it can either be a sole proprietorship or sometimes a partnership.

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Management: Generally both the management and the control is with the owner/owners. Hence the owner is actively involved in the day-to-day activities of the business.

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Labor Intensive: In SSI use of technology is very limited. They use labour and manpower for their production activities.

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Flexibility: SSI’s are more adaptable to their changing business environment. So in case of amendments or unexpected developments, they are flexible enough to adapt and carry on.

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Limited Reach: Small scale industries work for a smaller geographical area. Hence, they can meet their local and regional demand.

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Resources utilisation: SSI units mostly use the locally available resources. So there is maximum utilisation of resources with minimum wastage.

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Role in the Indian economy�

Employment: SSI’s are a major source of employment for developing countries like India. Because of the limited technology and resource availability, they tend to use labour and manpower for their production activities.

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Total Production: These enterprises account for almost 40% of the total production of goods and services in India. They are one of the main reasons for the growth and strengthening of the economy.

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Make in India: SSI’s are the best examples for the Make in India initiative. They focus on the mission to manufacture in India and sell the products worldwide. This also helps create more demands from all over the world.

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Export contribution: India’s export industry majorly relies on these small industries for their growth and development. Nearly half of the goods that are exported from India are manufactured or produced by these industries.

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Public Welfare: These industries have an opportunity to earn wealth and create employment. SSI’s are also important for the social growth and development of our country.

Objectives of SSI�

The objectives of the small scale industries are:

• To create more employment opportunities.
• To help develop the rural and less developed regions of the economy.
• To reduce regional imbalances.
• To ensure optimum utilisation of unexploited resources of the country.
• To improve the standard of living of people.
• To ensure equal distribution of income and wealth.
• To solve the unemployment problem.
• To attain self-reliance.
• To adopt the latest technology aimed at producing better quality products at lower costs.

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ANCILLARY UNIT

An industrial unit which is engaged or is proposed to be engaged in the manufacture or production of parts, components, sub- assemblies, tooling or intermediaries, or the rendering of services and the undertaking supplies or renders or proposes to supply or render not less than 5o percent of its production or services, as the case may be, to one or more other industrial takings and whose investment in fixed assets in plant and machinery whether held on ownership terms or on lease or on hire purchase, does not exceed Rs 75 lacs.

�An ancillary unit is the unit which supplies not less than 50% of its production to the parent unit. A tiny unit is the business enterprise whose investment in plant and machinery is not more than Rs One crore.

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Objective of Ancillary Industry.

The strategy for ancillary development was originally outlined with the objective of:

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• Development of employment opportunities coupled with growth of entrepreneurship in different fields and different parts of the country.

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• Increase in productivity of the small scale units.

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• Growth of a low cost economy through reduction in costs brought by appropriate technology followed by ancillary units.

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• Development of a single or multi discipline expertise in different fields to bring about economies of scale.

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Tiny Units

A tiny unit is defined as an industrial or business enterprise whose investment in plant and machinery is not more than Rs. 25 lakhs. ... As against this, small-scale industry employs hired labour. Moreover industries are generally associated with agriculture and provide subsidiary employment in rural areas and helps in boosting rural economy.

SERVICE SECTOR UNIT

The service sector, also known as the tertiary sector, is the third tier in the three sector economy. The service sector provides services, rather than producing material commodities. Activities in the service sector include retail, banks, hotels, real estate, education, health, social work, computer services, recreation, media, communications, electricity, gas and water supply.

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The service sector makes an important contribution to GDP in most countries, providing jobs, inputs and public services for the economy. Trade in services can improve economic performance and provide a range of traditional and new export opportunities.