ENTREPRENEURSHIP AND

PROJECT MANAGEMENT
By Ezan Mwiluki

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 LEARNING OBJECTIVE
To understand the linkage between Entrepreneurial and Project
Management Requirements and Competences
❖ Concept
❖ Characteristics of an Entrepreneur
❖ Importance Of Entrepreneurship
❖ Entrepreneur And Manager
❖ Intrapreneurs vs Entrepreneurs
❖ Types of Entrepreneurs Are Classified
❖ Entrepreneurial Mindset - Key Attributes Of The Entrepreneur
❖ Entrepreneurial Process
✓ Creative Idea Generation - sources And Methods
✓ Entrepreneurship Development
❖ Developing a Business Plan
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 TERMS

1. Businessman
2. Entrepreneur
3. Enterprise
4. Entrepreneurship
5. Intrapreneur
6. Manager

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THE CONCEPT OF ENTREPRENEURSHIP

Entrepreneur
Enterprise -Derived from the
French verb
Business Entrepreneurship
enterprendre, which
structure/object/ent - The Process of means ‘to undertake’
ity that: Action -One who
- The art of “undertakes” the risk
-Carries commercial starting a of new enterprises
-Creates job business -a creator or a
opportunities - Offering creative designer of new
product, process business ideas
-Gains some profits according to the
or service
market requirements
and his/her own
passion

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CHARACTERISTICS FOR AN ENTREPRENEUR

❖ Entrepreneur is a change agent- brings about

changes in the structure and formation of the
organization, market and the arena of goods and
services
❖ Risk-taker ❖ Open-mindedness towards
❖ Profit maker learning, people, and even
❖ Achievement motivator failure
❖ Passion ❖ Understands that a business is
❖ Creativity/Innovative all about the customer
❖ Professionalism ❖ Goal oriented
❖ Knowledge of his niche or ❖ Flexible
industry

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ENTREPRENEURIAL MINDSET

This is a way of thinking that enables you to overcome

challenges, be decisive, and accept responsibility for your
outcomes.
1. Decisiveness
2. Confidence
3. Accountability - taking responsibility for your actions
and outcomes
4. Resilience - learn to deal with making mistakes and
failing
5. Humility - freedom from pride or arrogance

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PERSONAL ENTREPRENEURIAL COMPETENCIES

1. Initiative – An entrepreneur is always ahead of others. Does

things before being asked or compelled by the situation
2. Takes advantage of opportunities
3. Persistence – making repeated efforts or taking different
actions to overcome an obstacle that get in the way of
reaching goals
4. Information Seeking - undertake research and use contacts or
networks to obtain useful information
5. Concern for High Quality of Work/Products/Services
6. Commitment to Work Contract - sacrifice or take
extraordinary effort to complete the job. Accept full
responsibility and ensure the customer is satisfied.
7. Efficiency Orientation
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PERSONAL ENTREPRENEURIAL COMPETENCIES…

8. Systematic Planning
9. Problem Solving
10. Self-Confidence
11. Assertiveness
12. Persuasion and influence
13. Monitoring
14. Concern for Employee Welfare

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ENTREPRENEUR VS INTRAPRENEUR
Entrepreneur
Intrapreneur
❖ Meaning: A person who set
❖ Meaning: An employee of the
up their own business with a
organization who is in charge of
new idea or concept.
undertaking innovations in
❖ Approach: Intuitive
products, services, processes
❖ Resources: Uses own
❖ Approach: Restorative
resources.
❖ Resources: Use resources provided
❖ Capital: Raised by them.
by the company.
❖ Enterprise: Newly established
❖ Capital: Financed by the company.
❖ Dependency: Independent
❖ Enterprise: An existing one
❖ Risk: Borne by the
❖ Dependency: Dependent
entrepreneur himself
❖ Risk: Taken by the company
❖ Works to: Create a leading
❖ Works to: Change and renew the
position in the market
existing organizational system and
culture
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ENTREPRENEUR VS MANAGER

Entrepreneur Manager
➢ Creates an enterprise, takes risks in ➢ Takes the responsibility of
order to get profit controlling and administering the
➢ Risk taker organization
➢ Focuses on business startup ➢ Risk averse.
➢ Achievements is their motivation ➢ Manage ongoing operations
➢ Informal approach to tasks ➢ Primary motivation is the power
➢ The owner of the enterprise ➢ Formal approach to tasks
➢ Profit is the reward for the ➢ Employee
entrepreneur ➢ Gets salary as remuneration for the
➢ Decision making is intuitive - driven work performed
by inductive logic, courage, and ➢ Decision making is calculative - are
determination driven by deductive logic, the
➢ Driven by creativity and innovation collection of information and
advice
➢ Maintains the existing state of
affairs

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SUMMARY OF PERSONAL CHARACTERISTICS
AND COMPETENCIES OF AN ENTREPRENEUR

These Characteristics that tend to make some people

better at recognizing opportunities than others

Prior Experience Cognitive Factors

Social Networks Creativity

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 SUMMARY OF XTICS AND COMPETENCIES …

Prior Industry Experience

❖Several studies have shown that prior experience in an
industry helps an entrepreneur recognize business
opportunities.
❖By working in an industry, an individual may spot a
market niche that is underserved.
❖It is also possible that by working in an industry, an
individual builds a network of social contacts who
provide insights that lead to recognizing new
opportunities.
 SUMMARY OF XTICS AND COMPETENCIES …

Cognitive Factors
❖ Studies have shown that opportunity
recognition may be an innate skill or cognitive
process.
❖ Some people believe that entrepreneurs have a
“sixth sense” that allows them to see
opportunities that others miss.
❖ This “sixth sense” is called entrepreneurial
alertness, which is formally defined as the ability
to notice things without engaging in deliberate
search.
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 SUMMARY OF XTICS AND COMPETENCIES …

Social Networks
❖ The extent and depth of an individual’s social network
affects opportunity recognition.
❖ People who build a substantial network of social and
professional contacts will be exposed to more
opportunities and ideas than people with sparse
networks.
Strong Tie Vs. Weak Tie Relationships
◦ All of us have relationships with other people that are
called “ties.” (See next slide.)

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 SUMMARY OF XTICS AND COMPETENCIES …

Social Networks …
Nature of Strong-Tie Vs. Weak-Tie Relationships
❖ Strong-tie relationship are characterized by frequent
interaction and form between coworkers, friends, and
spouses.
❖ Weak-tie relationships are characterized by infrequent
interaction and form between casual acquaintances.
Result
◦ It is more likely that an entrepreneur will get new business
ideas through weak-tie rather than strong-tie relationships.
(See next slide.)
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 SUMMARY OF XTICS AND COMPETENCIES …
Social Networks …
Why weak-tie relationships lead to more new business ideas than
strong-tie relationships
Strong-Tie Relationships Weak-Tie Relationships
These relationships, which
These relationships, which form between casual
typically form between like acquaintances, are not as
minded individuals, tend to apt to be between like-
reinforce insights and ideas minded individuals, so one
that people already have. person may say something
to another that sparks a
completely new idea.
 SUMMARY OF XTICS AND COMPETENCIES …

Creativity
❖ Creativity is the process of generating a novel or useful idea.
❖ Opportunity recognition may be, at least in part, a creative process.
❖ For an individual, the creative process can be broken down into five
stages, as shown on the next slide.

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 ENTREPRENEURIAL PROCESS:
GENERATION OF IDEAS AND ANALYSIS
OF OPPORTUNITIES

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 ENTREPRENEURIAL PROCESS:
GENERATION OF IDEAS AND ANALYSIS
OF OPPORTUNITIES
CREATIVITY
❖ Creativity - The ability to produce something that is both new and
valuable
“Creativity is the power of the human mind to create new contents
by transforming relations and thereby generating new correlates”—
Spearman.
❖Nature of Creativity
➢ Creativity is not confined to any individual
➢ Creativity is innate as well as acquired
➢ Creativity is adventurous and open thinking
➢ Creativity carries ego involvement
➢ Creativity has a wide scope - covers all fields and activities of
human life
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 ENTREPRENEURIAL PROCESS …
IDEA GENERATION
❖ Creative process or procedure used to figure out solutions to difficult challenges
facing an enterprise/company
❖ Involves coming up with many ideas, selecting the best idea or ideas, working
to create a plan to implement the idea, and putting the idea into practice.
Sources and Methods of Idea Generation
➢The 5W+H Method (Who, what, where, when, why, and how?): Responses to
these questions (on any topic) should stimulate the brain to rethink the whole
subject and find a new angle of looking at things.
➢Social Listening: Though social media feedback and opinion poll
➢Brainstorming: filter through all suggestions
➢Role Playing: switch places with colleagues and try to embrace their point of view

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 ENTREPRENEURIAL PROCESS …
Sources and Methods of Idea Generation…
❖ Mind Mapping: A diagram for representing tasks, words, concepts,
or items linked to and arranged around a central concept or subject
using a non-linear graphical layout that allows the user to build an
intuitive framework around a central concept.
➢ Helps make meaningful
connections between ideas
➢ Enables visualization of
ideas
➢ Held organize wide range
of data and related tasks
➢ Enables collaboration with
teams virtually
➢ Gives every team a chance
to contribute
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 ENTREPRENEURIAL PROCESS …
Sources and Methods of Idea Generation…
❖ Think In Reverse: Instead of thinking about how to reach your
goal, you can think about how not to achieve it. negative thinking
often leads people to unbelievable conclusions, which in turn brings
them a bunch of new ideas.

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 ENTREPRENEURIAL PROCESS …
Sources and Methods of Idea Generation…
Start by stating the problem you wish to solve or the
❖ SCAMPER method: thought you wish to develop. Then ask the following:
S = Substitute S: What to substitute in my process of selling?
C = Combine C: How do I blend selling with other activities?
A = Adapt A: What to copy or adapt the selling process of
M = Magnify another person or company?

P = Put to Other Uses M: What do I put more weight on or magnify when

selling?
E = Eliminate (alternative is Minify)
P: What other uses can I put my selling to?
R = Rearrange (alternative is Reverse)
E: What do I eliminate or make easier in my process
of selling?

R: How do I change, reverse or reorder my manner

of selling?)
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ENTREPRENEURIAL PROCESS …
ENTREPRENEURIAL INNOVATION
Innovation – This is an economic or social phenomenon rather than
a technological term. Innovation is not about making new
inventions, but rather about recognizing how to take advantage of
opportunities and changes.
Types of Innovation
❖ Organizational Innovation - new organizational strategy that will
somehow change a company’s business practices.
❖ Process Innovation: Implementing a new or improved
production or delivery approach, including changes in
operational methods, the techniques used and the equipment or
software.

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 ENTREPRENEURIAL PROCESS …
Types of Innovation
❖ Product Innovation: Introduction of a new or improved good or
service. improving technical specifications, the materials or the
software used or even advancing on UX (user experience).
E.g. first electric vehicles introduced in the car’s market, new
batteries with longer ranges that keep coming out
Routine changes or updates aren’t considered product innovations
as they are only correcting errors or making some seasonal changes.
❖Marketing Innovation: Developing a new marketing strategy that
produces changes in the way a product is designed or packed, or
even other decisions regarding price or promotion.

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ENTREPRENEURIAL OPPORTUNITIES
What is An Opportunity?

An opportunity is a favorable
set of circumstances that
Opportunity Defined creates a need for a new
product, service or business.

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ENTREPRENEURIAL OPPORTUNITIES …
An opportunity has four essential qualities

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ENTREPRENEURIAL OPPORTUNITIES …

Three Ways to Identify an Opportunity

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ENTREPRENEURIAL OPPORTUNITIES …
First Approach: Observing Trends
Observing Trends

◦ Trends create opportunities for entrepreneurs to pursue.

◦ The most important trends are:
◦ Economic forces.
◦ Social forces.
◦ Technological advances.
◦ Political action and regulatory change.
◦ It’s important to be aware of changes in these areas.

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 ENTREPRENEURIAL OPPORTUNITIES …
Observing Trends …

Environmental Trends
Suggesting Business or
Product Opportunity
Gaps

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ENTREPRENEURIAL OPPORTUNITIES …
Observing Trends …
Economic Forces
Example of Economic Trend
Economic trends help Creating a Favorable Opportunity
determine areas that are
ripe for new startups and • A weak economy favors
startups that help consumers
areas that startups should
save money.
avoid.

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ENTREPRENEURIAL OPPORTUNITIES …
Observing Trends …
Social Forces
Examples of Social Trends
Social trends alter how
people and businesses •The increasing diversity of
behave and set their the workplace.
priorities. These trends • Increasing interest in health,
fitness, and wellness.
provide opportunities for
• Emphasis on alternative forms
new businesses to of energy.
accommodate the • New forms of music and other
changes. types of entertainment.

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ENTREPRENEURIAL OPPORTUNITIES …
Observing Trends …
Technological Advances
Examples of Entire Industries
that Have Been Created as the
Advances in technology Results of Technological
frequently create Advances
business opportunities.
• Computer industry
• Internet
• Biotechnology
• Digital photography
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ENTREPRENEURIAL OPPORTUNITIES …
Observing Trends …
Technological Advances
Example: H20Audio
Once a technology is An example is H20Audio, a
created, products often company started by four
emerge to advance it. former San Diego State
University students, that
makes waterproof housings
for the Apple iPod.

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ENTREPRENEURIAL OPPORTUNITIES …
Observing Trends …
Political Action and Regulatory Changes
Political action and Laws to protect the
regulatory changes also environment have created
opportunities for entrepreneurs
provide the basis for
to start firms that help other
opportunities. firms comply with
Company created to help environmental laws and
other companies comply regulations.
with a specific law.

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ENTREPRENEURIAL OPPORTUNITIES …
Second Approach: Solving a Problem
Solving a Problem
◦Sometimes identifying opportunities simply
involves noticing a problem and finding a way to
solve it.
◦These problems can be pinpointed through
observing trends and through more simple means,
such as intuition, serendipity, or change.

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ENTREPRENEURIAL OPPORTUNITIES …
Solving a Problem…

• A problem facing the U.S. and

other countries is finding
alternatives to fossil fuels.
• A large number of
entrepreneurial firms, like
this wind farm, are being
launched to solve this problem.

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 FULL VIEW OF THE OPPORTUNITY
RECOGNITION PROCESS
Connection between an awareness of emerging trends and the
personal characteristics of the entrepreneur

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ENTREPRENEURIAL OPPORTUNITIES …
Third Approach: Finding Gaps in the Marketplace
Gaps in the Marketplace
◦ A gap in the marketplace is often created when a
product or service is needed by a specific group of
people but doesn’t represent a large enough
market to be of interest to mainstream retailers or
manufacturers.
◦ Product gaps in the marketplace represent
potentially viable business opportunities.

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 BUSINESS PLAN
❖ Business plan is a written statement of what an
entrepreneur proposes to take up. A guide or course of
action what the entrepreneur hopes to achieve in his
business and how is he going to achieve it.
❖ A formal written expression of the entrepreneurial vision,
describing the strategy and operations of the proposed
venture
❖ A roadmap that spells out where you are, where you
want to be, and how you want to get there

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 BUSINESS PLAN …
MAIN PURPOSES OF A BUSINESS PLAN
❖Establish a business focus: BP includes goals or milestones alongside detailed steps
of how the business will reach each step
❖Secure funding: investors, banks or other lenders are interested in knowing the
business is or will be operated, its revenue and expense projections and how they
will receive a return on their investment.
It is on the basis of business plan that financial institutions make appraisal if the
enterprise requires financial assistance or not.

❖Attract executives: with talent and fit for the company

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 STEPS FOR WRITING THE BUSINESS PLAN
1. Define Purpose:
The business plan will serve its purpose better if its purpose is spelt out in the very beginning.
There may be multiple goals in writing the business plan. For example, the entrepreneur may
be. planning on using the business plan to secure bank finance as well as to attract a major
corporation as a strategic partner. It is okay to have multiple goals, but some amount of
customizing should be done before placing it in front of different audiences.
2. Collect Information:
All sorts of information about the business and the industry should be collected. List out all the
information you already have with you, figure out the major gaps in information, and go out
there to get more information. Do not rate the quality of this information; just gather it. At this
point, the more you can find the better.
3. Write Down Things: After enough information has been gathered, you can plan on starting
the actual writing. Think of a rough structure appropriate for the business plan and start
writing. It is important to note down things on paper without being too particular about
sequence and grammar. Approach it like a brainstorming session. Do not be critical of your
efforts. Just make sure that you are putting enough thoughts on paper.

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 STEPS FOR WRITING THE BUSINESS PLAN
4. Prepare a Rough Draft:
Now it is time to give shape to your business plan and make it concrete. Correct grammatical mistakes
and break up the written account into meaningful sections. Compare your writing to your intended
outline and make necessary changes. As your work progresses, you will need to make a note of what
else needs to be added. For some topics, more information will be needed. At this stage of the writing
process, you are going to decide on the level of detail necessary to be included in the business plan.
5. Do Financial Analysis:
The numbers will continue to be important. After all costs and revenue estimates have been arrived at,
pro-forma financial statements are to be drafted. That will lead to drawing up the sensitivity analysis,
the ROI calculation, the break-even analysis, and other financial rations. The numbers should be
realistic and consistent.

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 STEPS FOR WRITING THE BUSINESS PLAN
6. Finalize the Plan:
Finalizing the business plan is certainly a hard job. Language and spellings have to be checked, the
numbers have to be scrutinized and formatting has to be completed. Even small errors can leave a very
bad impression. The business plan should not be ornate but should have a professional look about it.
Set a deadline for completing it and adhere to the deadline. One good way to enforce a deadline is to
tell some people that you will be showing them the business plan by a certain date. Now it will be hard
for you to ignore the deadline.

7. Get the Plan Reviewed:

Do not review your business plan yourself. Ask someone else to do it. It could be a family member, a
friend, or a professional acquaintance. Even better would be if you could get a number of people to do
it. After getting comments on your plan, you should incorporate only those suggestions that you find
convincing.

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 BUSINESS PLAN …
OUTLINE

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 BUSINESS PLAN OUTLINE

- Cover Page 6. Operations

- Executive Summary 7. Production Plan
1. Introduction 8. Financial Plan
- Description of the Company/Profile 9. Risk analysis
2. The Product or Service
3. Situation Analysis – Competitor
Analysis, SWOT
4. Marketing
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 BUSINESS PLAN OUTLINE …
Cover Page
❖ Full name of the business;
❖ Business address;
❖ Registration number;
❖ Contact details (Address, Phone number, e-
mail);
❖ Date the Business plan was completed.

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 BUSINESS PLAN OUTLINE …
Executive Summary
❖ Should be brief, but should provide the reader with
complete overview of the entire business plan
❖ Emphasis the key issues presented and focus on the
factors that will make the business successful in a
competitive market.
❖ Should be the last section of the business plan that you
write.

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 BUSINESS PLAN OUTLINE …
Executive Summary …
• Company Summary: Focus on ownership, structure, history, and size.
• Product or Service Summary: What makes them better or different, pricing
gross profit margin of goods, and any patents or other protection you have.
• Market Summary: Geographic market area, customer profile or target
market,
• market opportunities, industry trends, and sales potential.
• Management Summary: Management expertise, who will be making the
decisions
• and who will be running the business on a daily basis.
• Financial Summary: owner’s equity injection, time and sales volume
necessary to
• break-even, your financial needs and your ability to service the debt

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 BUSINESS PLAN OUTLINE …
1. Introduction/Background - 1 or 2 pages
❖ Description of the Company/Profile:
- For start-up company illustrate how you envision the company
- For existing company explain the “before” and “after” position
✓ History: Founded when by who;
✓ Mission Statement- Why are you in business?; Short/long term
objectives
✓ Ownership Structure - sole proprietor, corporation, partnership?
Shareholders and directors

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 BUSINESS PLAN OUTLINE …
1. Introduction/Background …
✓ What type of business are you in? Retail, Manufacturing, Service
✓ Product offering: What type of products?
✓ Target market: What target markets are we serving or we you
intend to serve?
✓ Size of company: Management team, number of employees,
average monthly payroll, sales,

❖ Motivation
✓ For a new business idea, product or service provide motivation for
starting this business, explain where you currently are and your
timeframe for success
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 BUSINESS PLAN OUTLINE …
2. The Product or Service (Current and Proposed)
❖ Detailed description of products or services
✓ Types of products, colors, styles, and models
✓ IP, Patents, Copyrights - A description of how the intellectual
property is protected, who owns it
✓ Function of the product/service, its unique application, distinctive
advantages
✓ Product’s competitive edge or strengths:
• What makes the product or service different?
• What benefits are there to the consumer?
• Are you the only distributor?
• Why would anyone use your product over another product?
• Are there any substitutes for the product/service?
• How do the main features of the product/service compare with
those of your competitors?
✓ R & D efforts and future products - Are you going to have other
products on the “drawing board”?
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 BUSINESS PLAN OUTLINE …
2. The Product or Service …
❖ Pricing Strategy -
✓ How are you going to price your service, product or merchandise
to make a fair profit and, at the same time, be competitive?
✓ What price do you intend getting for your product/ service? Is this
price competitive?
✓ Why will someone pay your price?
✓ How did you arrive at that price? Is it profitable?
✓ What price is the competitor charging? Why is it more expensive or
cheaper than your service product?
✓ Product sales: What percent do you expect each category of
products and services to contribute to total sales?
✓ Product margins: Describe the price-vs.-cost relationship. Use either
gross margin approach (price -variable costs = gross margin), or the
mark-up approach (cost / sales price = markup).

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 BUSINESS PLAN OUTLINE …

3. Situation Analysis - Competitor analysis, SWOT

❖ Achievements and Challenges: What major events/milestones
have occurred to date, Challenges and how they were overcome
❖ Competitors strengths and weaknesses
✓ Identify the main competitors, Who are the potential competitors,
how large are they and how are they organized?
✓ Their strengths and / or weaknesses
✓ Their market share, how will you succeed over them
❖ Competitive Advantage – do the analysis in conjunction with
SWOT
✓ What is your business good or not good at
✓ On what basis do my rivals compete: price, sales volume,
reputation, product design, quality, reliability, service?

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 BUSINESS PLAN OUTLINE …

3. Situation Analysis - Competitor analysis, SWOT

❖ How does your product compare with those already available in

terms of price, performance, reliability?
✓ What makes the product superior or different and how can I
protect its unique features from imitation?
✓ What barriers does a new entrant face and how is the
competition likely to react to my entrance into the market? Will
they retaliate and, if so, how? Will others follow my lead?
✓ In what areas are my competitors demonstrably competent?
Where are they vulnerable and how can I exploit this?
✓ How do my potential customers see the competition?

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 BUSINESS PLAN OUTLINE …

3. Situation Analysis - Competitor analysis, SWOT

SWOT Analysis
❖ What are your strengths?
❖ What are your weaknesses?
❖ Is there really an opportunity for your business in the industry?
❖ What are the external factors affecting your business
❖ Come up with Actions to address weaknesses and threats -strategy
can be formulated that will either negate this weakness or
develop this weakness into a strength?

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 BUSINESS PLAN OUTLINE …
4. Marketing Strategy
Accurately identify your customer base; undertake market analysis,
provide your marketing strategy and indicate why you believe it will
succeed guided by the following.
❖ Market Size: Geographic market area; demographic variables like
age, sex, income, etc; Estimate the total market size by each
market segment
❖ Industry trends: What are sales for the industry as a whole?;
trends in the industry (demand for the product)
❖ Customer Analysis: Describe your specific customers using a
demographic profile; where are they located?; How will you
attract and keep customers?
❖ Potential Market: How can you expand your market?
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 BUSINESS PLAN OUTLINE …
4. Marketing Strategy …
❖ Advertising and Promotional Plan: How are you going to
advertise to customers - Radio, TV, mail, fliers; When will you
advertise and how often?
➢ How will you cultivate more sales?-direct sales, direct mail,
coupons
➢ Cost to advertising and promotion
➢ Cost of research
➢ Cost of packaging & distribution
❖ Selling and Distribution: Distribution channels, direct sales force,
agents, freelance commission reps, selling by the management
team itself?

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 BUSINESS PLAN OUTLINE …
5. Operations
❖ Infrastructure
Facilities
➢ Requirements as to the size of structure, location, utilities. Clarity
of the issues for a proper of costs associated with running the
facilities.
➢ Plan and layout of the plant or service facility can be in the format
of a drawing
Machinery/equipment
➢ Type
➢ Maintenance issues
❖ Legal and environmental issues
✓ Any industry regulations
✓ Tax obligations
✓ Environmental issues
✓ Safety Issues
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 BUSINESS PLAN OUTLINE …
5. Operations
❖ Human Resource Plan
➢ Management: Summary of who the owners/directors are and the
degree of their control over the company.
➢ Analysis of expected future staffing needs
✓List the technical expertise, competence and experience of staff.
✓Professional Advisors: Accountants; Attorney; Consultants
➢ Proposed remuneration
➢ Management/reporting structure, responsibilities
❖ Administrative and Accounting Controls
➢ Methods and procedures to facilitate management, planning and
the control of your operations and ensure the accuracy of financial
records
➢ MIS: How is information processed in the organization (manual
system or computerized) and by whom?

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 BUSINESS PLAN OUTLINE …
6. Production Plan
❖ How you will manufacture your product and how the production
process operates.
➢ Consider the arrangement of plant and equipment for production –
the design
✓ How will you manage the smooth transition from producing a
prototype to producing in volume? Design-prototype-pre-
production-production
➢ Flow of activities from input, production and storing to delivery of
the end product/service
➢ Production capacity planning begins with the demand for the
various products and services
➢ Production scheduling - is influenced by the customer’s need for
delivery and the delivery of raw materials/services from your
suppliers

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 BUSINESS PLAN OUTLINE …
6. Production Plan
➢ Supplies and Inventory – gives a clear indication of the required
lead time for the delivery of raw materials and what stock to keep
on hand
➢ Suppliers Analysis - Who are your main suppliers and alternative
suppliers? Is the source guaranteed or reliable? Are there any
contracts with the suppliers?
➢ Quality: how will this be monitored, particularly as output
increases, and what are the costs/benefits of your quality control
strategy?
NB: Not all aspects of the production process will be equally critical.
Focus on those that are, show that you understand where problems
may occur and that you have a strategy for dealing with these.

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 BUSINESS PLAN OUTLINE …
7. Financial Plan
✓ Gives financial implications of the business
✓ Substantiates financial requirements
✓ Provides a measure of performance
❖Start-up and Operating costs
➢ Actual amount of money needed (realistic start-up
budget) including
➢ How much money is needed to keep the business open
(realistic operating budget)?
➢ How much money do you have
➢ What sources of funding do you anticipate, explain
where you are going to get funding from and how you
are going to apply these funds.

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7. Financial Plan …
❖ Financial Analysis
➢ Includes narrative summary of the following in the main body of the
document:
✓ Sales forecast: Estimating what your business’s sales are going to be in
the future, monthly, quarterly, half-annually, or annually.
✓ Profit And Loss Account (P&LA): income statement or statement of
operations, is a financial report that provides a summary of a
company’s revenues, expenses, and profits/losses over a given period of
time
✓ Balance Sheet (BS): P&LA and BS show whether business operations are
profitable and how assets are expected to grow over the years.
✓ Cash Flow Forecast: Essential for liquidity/cash planning for new
venture. Based on sales forecast, operating costs and cash expenditures
✓ Capital investment needs and the anticipated payback on this
investment
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7. Financial Plan …
✓ Breakeven analysis: Determines the sales volume your business
needs to start making a profit, based on your fixed costs, variable
costs, and selling price.
- How many units of your products or service will have to be sold
to cover your costs?
✓ Detailed financials data (on the above) is best kept to an appendix
✓ The forecast should be 3 to 4 years; month by month for the first
year (12 months)
➢ Consider the following in the forecast:
✓ The prevailing financial data elsewhere in the industry;
✓ Be realistic, avoid over optimism and an unrealistic assessment of
what the business is able to achieve
✓ Do not leaving out important info. or disguise difficulties as it may
lead to lose of credibility
✓ Highlight key assumptions and areas of uncertainty.
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8. Risk Analysis
❖ Address the risks associated with the proposal at each stage at
which these occur, e.g. productions, sales, staffing etc… or,
alternatively, conclude your plan with a separate section devoted
specifically to risk
❖ Property/Asset Risk: – Identify the specific risks and give reasonable
measures protect assets
❖ Personnel/staff Risks
❖ Customer Risk
❖ Competitors Risk - Competitors may be enhancing a product and
the manufacturing, marketing or delivery thereof, which could
result in your business losing market share.
❖ Pricing Risk: Is my product competitive priced, need product,
process or marketing adjustments, effect of inflation

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9. Exit Strategy
❖ To what degree do you want to grow the business?
❖ Do you intend selling the business when your objectives have been
achieved?
❖ How do you plan to get yourself (and your money) out of the
business?
❖ How will investors get their money back?

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