Basic Information for Preparing a Business Plan

Part – 1 (Business Idea)

1)      What is your IDEA?

       Entrepreneur should be clear about their business idea.

2)     Mission and Vision

      The mission of a project explains its purpose of being. The mission should be very short (one sentence to one paragraph) and formulated simply. The vision communicates what the project aims to achieve in the mid-term or long-term.

3)     Business Objective

      The performance of a business affects its prosperity and success. In order to perform well, an entrepreneur should define specific sets of results that he/she wants to achieve with the social business.

4)     What is the social problem?

The social business responds to a social problem. The business idea aims at solving that social problem. The entrepreneur should target one specific social problem.

5)     How can it be overcome?

The entrepreneur should have a clear strategy on how to solve the social problem through his business idea.

Part-2 (Personal Information)

1)      Entrepreneur Background

Acknowledging the background of the entrepreneur is essential as it helps to identify his/her strengths and weaknesses. If correctly identified, the management team can ensure that another person with complementary skills is added to the team. Having a strongly skilled team will increase the potential success of the business.

2)     Experience and particulars

The entrepreneur puts his/her skills and experience at the service of the social business. Consequently, it will have an impact on the development of the business. An entrepreneur with low experience may want to surround him/herself with people with more experience. It will contribute to the survival of the social business.

3)     Current Profession of Entrepreneur

The current professional activity of the entrepreneur permits to analyze his/her commitment and his/her skills set to input in the project.

Part-3 (Investment Size)

1)      Project Investment Cost

The entrepreneur should forecast the amount of investment that the project will require to start its activity and render a profit.

2) Source Of Fund 

• Own

The entrepreneur may fund his/her project with his/her own personal money.

• Looking

On the contrary, the entrepreneur may be searching for investors for his project. Attending the Social Business Design Lab is a good place to start.

3)     Existing Project Cost

The entrepreneur should detail the costs that will surely have to be covered at one point in time. Entrepreneurs should keep in mind that additional costs may have to be incurred as the project develops.

4)     Detailed Project Information 

Entrepreneurs should determine the exact project developments in order to have as fewer surprises as possible. In this way, forecasted financial needs are more relevant.

Part-4 (Product catagories and statistices)

1)      What type of product/service will you produce? Specifications.

The entrepreneur should be clear on what kind of product/service he/she wants to offer to solve the social problem. He/she should create a detailed elaboration of the characteristics of the product/service and the intended ways to distribute it.

2)     Example of similar business

The entrepreneur may find useful to gather information and details about similar projects or companies. They can provide insights about the product/service activities that are relevant for the social business-to-be.

3)     Production Budget

When offering a product/service, the entrepreneur should be aware of the costs of production. Forecasting the production costs help to have a financial overview of the project but also enables the entrepreneurs to eventually close discount deals with suppliers.

4)     Production process loss

Entrepreneurs should be aware that production losses exist and they should be taken into consideration, especially when calculating future profits and losses. Production loss may be predicted before the project is initiated or may occur due to unanticipated situations like bad weather conditions, low quality raw materials etc.

Part-5 (Raw Materials)

1)      Types of raw materials

Raw materials are the most important when a business offers products. Choosing raw materials or inputs to be processed to produce the final product is key to ensure a certain level of quality or to limit unanticipated events. Raw materials are to be chosen carefully as it impacts costs, quality and efficiency of the project.

2)     Source of raw materials

Similarly, choosing suppliers is essential as it has an impact on costs, quality and efficiency. Having agreements with a supplier may lead to costs reduction

3)     Unit price

Entrepreneurs should take into consideration the cost of producing and distributing the service/product. In addition, entrepreneurs should determine their selling price. The selling price should cover the costs of production and add a margin for profit. The entrepreneur should ensure that the targeted customers could afford the product/service. An identical process should be done for every product/service offered (various items or sizes)

4)     Budget of raw materials

Raw materials represent a large part of the overall budget of the project. Budgeting raw material will then decrease uncertainty that may cost the project its survival. In addition, forecasting the right amount of raw material needed over a period of time is essential to ensure good distribution of the product/service.

5)   Optimum stock level

Optimum stock level refers to inventory management. Managing an inventory involves managing lead times, replenishment, quality of production etc. Reaching an optimum means balancing these different requirements.

Part-6 (Financial Performance)

1)  Project financial forecast for  5 years

Entrepreneurs should provide the forecast of their financial performance over a period of 5 years. It will provide the necessary information to support the project.

2)    Break Even point

The break-even point is the point in time when costs and revenues are equal.

Its important to forecast the break-even point as it is the moment when the project will make profits if revenues keep increasing.

3)     Pay back period

It is the period of time needed to recover the funds invested and to repay the investors. It gives an approximation to the investors of when they will recover their investment. If the forecasted financial outputs are favourable and the payback period deducted from it is reliable, it may strongly increase the confidence of the investors in the project.

Part - 7 (Market and Sales Strategic)

1)      Marketing, Selling &Distribution system

Distributing a product/service involves making it known and accessible to your customers.

Entrepreneur can make use of various marketing and selling strategies like promotion for example. They should also decide which distribution channels they will use. One can sell its products locally, nationally, internationally in stores, in supermarkets etc. Nowadays, new ways to deliver products/services appear like E-commerce or E- business.

2)     Sales Budget

Entrepreneur should forecast the amount of sales they hope to reach. It will contribute to determine the anticipated time that the business will return the investment.    

3)     Market competitors

Determining if a project can be successful necessitates a good evaluation of the competition on the market. If competition is too strong, the business might not gain enough market share to succeed.

4)     Target customer

Entrepreneurs should clearly define the people they aim to sell the product/service to. An entrepreneur should group customers having similar characteristics in order to create market segments.  It will have an impact on many aspects of marketing, distribution and selling price.

5)     Pricing

The selling price of the product/service impacts its attractiveness and affordability to the consumers.

 Part-8 (Project Identity)

1)      Project Location

The location of the project is essential in some cases. For example, if it has to be close to the supply of raw materials, close to customers or close to a transportation location. Carefully choosing the location is key to optimize the project or even avoid future costs.

2)     Legal information:

i) Converting exisiting business into a social business

An entrepreneur shifting from a business to a social business has some legal impacts. He/she needs to take actions regarding the legal issues

ii) it will be a company under the companies act, 2014

Some legal acts apply to these businesses.

Part-9 (Return on Social Impact, ROSI)

1)      Social Impact:

As the “business idea” section explained in the first part of this paper, the very existence of the project is to solve a social problem. Measuring the social impact of the project is thus key into determining if the business was a success or not.

If the project successfully repays the investors but fails to solve or to reduce the impact of the social problem, one cannot say that the social business was a success.