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In other words, business plan serves like a kind of big road map to reach the destination determined by the entrepreneur.
The business plan that a company comes up with also serves as a reference point.
It helps you determine whether or not you have drifted from your original vision and in case you have, it helps you get back on track.
A good project report or business plan should contain the following contents: 1. Schedule of Implementation Arguments are made for and against writing a business plan.
General Information: Exact location of the project, lease or freehold, locational advantages. Land and Building: Land area, construction area, type of construction, cost of construction, detailed plan and estimate along with plant layout. Plant and Machinery: Details of machinery required, capacity, suppliers, cost, various alternatives available, cost of miscellaneous assets. Production Process: Description of production process, process chart, technical knowhow, technology alternatives available, production programme. Utilities: Water, power, steam, compressed air requirements, cost estimates, sources of utilities. Transport and Communication: Mode, possibility of getting, costs. Raw Material: List of raw material required by quality and quantity, sources of procurement, cost of raw material, tie-up arrangements, if any, for procurement of raw material, alternative raw material, if any. Manpower: Manpower requirement by skilled and semi-skilled, sources of manpower supply, cost of procurement, requirement for training and its cost. Products: Product mix, estimated sales, distribution channels, competitions and their capacities, product standard, input-output ratio, product substitute. Market: End-users of product, distribution of market as local, national, international, trade practices, sales promotion devices, and proposed market research. Requirement of Working Capital: Working capital required, sources of working capital need for collateral security, nature and extent of credit facilities offered and available. Requirement of Funds: Break-up of project cost in terms of costs of land, building, machinery, miscellaneous assets, preliminary expenses, contingencies and margin money for working capital, arrangements for meeting the cost of setting up of the project. Cost of Production and Profitability of first ten years. The argument advanced against writing business plan is that it involves costs especially when some outside consultant or accountant or lawyer is hired to write the business plan.
One of the reasons for not writing business plan is the fear of prematurely closing off the new venture.
The major argument made in favour of writing business plan is reducing anxieties and tensions in running business enterprise.
to serve as a road-map in setting up a business enterprise.
Having gone through the significance of business plan, it is now clear that there is no substitute for a well-prepared business plan or project report and also there are no shortcuts to preparing it.
In simple words, business plan is a written statement of what an entrepreneur proposes to take up.
It is a kind of guide frost or course of action what the entrepreneur hopes to achieve in his business and how is he going to achieve it.