BUSINESS PLAN OF NEW VENTURE
1.What is a Busines Plan? * A written document that serves as a blueprint and guide for a proposed business project that one intends to undertake;
2. What are the purposes of a Business Plan? * To allow the entrepreneurs to view and evaluate the proposed business venture in an objective, critical and practical manner; * To analyse and evaluate the viability of a proposed venture * As a guideline for managing the business * To allocate business resources effectively * To convince relevant parties of the investmet potential of the project
3. Components of a Business Plan
What comprises of a Business Plan of a Proposed Business:
It consists of the following sections: 1. Introduction 2. Purpose 3. Company background 4. Owner/Partners background 5. Location of the business 6. Administratiove plan 7. Marketing plan 8. Operations plan 9. Financial plan 10. Conclusion

1. INTRODUCTION SECTION includes: a. Name of the company b. Nature of business c. Industry profile d. Location of the business e. Date of business commencement f. Factors in selecting the proposed business g. Future prospects of the business

2. PURPOSE Every Business Plan is prepared with a particular purpose. Or as a guide for the entrepreneur to manage the business. Eg. This business plan is prepared by Riverside Thai Food Restaurant as a guideline for managing the proposed venture. 3. COMPANY BACKGROUND
This section includes: a. Name of company b. Business Address c. Correspondence Address (include website/email address) d. Telephone/fax nos. e. Form of business (sole-proprietorship/partnership/sdn. Bhd.) f. Main business activities/focus g. Date of project commencement h. Date of business registration (trade licence) i. Registration no j. Name of Bank and bank account no

4. OWNER/PARTNERS BACKGROUNDS
The information in this section serves to highlight the owner’s or partners’ business credibility as well as their ability to manage proposed business. They include: a. Name of owner/partners b. Identity card number c. Permanent addess d. Correspondence address (include website/email address) e. Telephone contacts (house/Hp nos) f. Personal details such as date of birth/age/marital status g. Academic qualifications or professional affiliations h. Courses attended/skills/experiences i. Present occupation j. Previous business experience

5. LOCATION OF BUSINESS A. Physical location of business B. Building type/premise (at shophouse/mall or special zone C. Basic amenities available such as water.eElectricity,bank and shopping facilities

6. ADMINISTRATIVE PLAN (MANAGEMENT OF THE BUSINESS) a. Introduction to Organisation - state its vision and objectives and strategies b. Business inputs - Capital or source of financing/manpower/technology/materials c. Organisation chart – to shown how a business is structured d. Manpower Planning – to list down all staff and their positions with duties (job analysis/job descriptions and job specifications) e. Personnel Management and Legal acts (socso/EPF/Employment Acts 1955 Requirement) f. Schedules of tasks and responsibilities – timetable of duties g. Schedule of remunerations h. List of equipments ( cooking utensils/cups if it is a restaurant business) i. Administrative Budget to buy Fixed Assets. To pay for monthly expenses like wages/rental and utilities bill and other expenses like legal fee and deposit for rental or business licences

7. MARKETING PLAN a. Product and service description b. Target size – do market survey to determine the size of mkt potential c. Competitor- do research to determine your competitor d. Market share – decide or determine your market share in the industry e. Develp the sales Forecast f. Develop Marketing Strategy
i.Brand name/quality/service or product package/product differentiation/extra attraction/ extra services (tapau)/guarantee (refund) g. Develop Marketing Budget h. Promotion strategy (radio/tv/website promo/billboard/flyers

8. OPERATIONS PLAN a. Transformation Process – the transformation of inputs to output
Eg. In the case of a service industry such as a restaurant, it will have different set of inputs like: i. Raw materials ( fish, vegetables, chili, other cooking ingredients ii. machines and equipments – blender, knife, tray, plate cooker iii. method and technology – frying/steaming/baking/chopping /boiling iv. work force – general workers, cashier and chef b. Productivity Index = Total Value Output/Total Value of Input
( A ratio greater than 1 indicates that the business operation is running effectively)
Ie. a restaurant makes a sales of RM60k per month and the operational cost is RM40k per month. The Productivity ratio is RM60k/RM40K = 1.5.
The PI is greater than 1, so the business is doing well and can make profit c. Job Activity Chart – from receiving order to receiving payment d. Bill of materials for each product – ie, if he want to prepare a steamboat of 1 kilogram of grouper fish, what are the materials (ingredients to be used. And then work out the average amount of materials based on sales forecast e. Capacity planning – the amount of output that can be produced within a specified time. In a restaurant business, the customer must plan the customers’ seating capacity ant the kitchen capacity. The customers’ seating capacity should be based on expected minimum numbers of customers during peak hours. f. Layout of business place – ie. restaurant layout g. Calculations of Operations cost 9. FINANCIAL PLAN A financial plan incorporates all financial data derived from operating budgets ie, marketing, operations and administrative budgets.
The process of developing a Financial Plan includes the following steps:
i.Gather all financial inputs ii.Prepare the project implementation cost schedule iii, prepare the sources of finance schedule iv. Prepare the pro forma cash flow statement v. Prepare the pro forma balance sheet vi. Perform financial analysis based on the above pro forma statements 1. COMPONENTS OF PROJECT IMPLEMENTATION COST a. Capital Expenditure – procurements of fixed assets like machines, fixtures and fittings and renovations b. Working capital requirement – the determination of initial amount of working capital is based on the length of time needed by the firm to generate its first sales multiplied by the amount of monthly operating expenditure to cover marketing, operation and administration costs. c. Other expenditures – business registration, licensing, insurance premium, road tax, stamp dutied, legal and professional fees, deposits for rental and utilities etc. d. Contingency cost – ie 5 -10 percent of Implementation costs 2. COMPONENTS OF THE SOURCES OF FINANCE SCHEDULE a. Internal sources – equity contributions (cash or assets) b. External sources – term loan, hire purchase, others (government grants)

3. ELEMENTS IN THE CASH INFLOW & OUTFLOW
-equity contributions in cash
- term loan
- cash sales
-collections of receivables
-sales of assets
4. ANALYSING OF FINANCIAL RATIOS
a. Liquidity ratios – current ratio= current assets/current liability - quick ratio= current assets-stocks/current liabilities
b. Efficiency ratios – stock turnover = cost of goods sold/average stock -Receivables (debtors) turnover = credit sales/debtors -Average collection period = Trade debtors x 365 days/Credit sales - Profitability ratios i. Gross Profit Margin = Gross Profit/Sales ii. Net Profit Margin = Net Profit/Sales iii. Return on Investment = Net Profit /Total sales iv. Return on Equity = Net profit /Equity