ENTREPRENEURSHIENTREPRENEURSHIPPSmall Business PlanSmall Business Plan

Dr. Muslim Suardi, MSi., Apt. Dr. Muslim Suardi, MSi., Apt. Faculty of PharmacyFaculty of Pharmacy

University of AndalasUniversity of Andalas

PlanningPlanning

“The systematic process of developing an outline for the accomplishment of a

goal or set of goals”

Planing is one of the most important skills needed for starting a business

FORMULATING A BUSINESS PLAN FORMULATING A BUSINESS PLAN

1. Concept History & Background

2. Goals & Objectives

3. Marketing Plan

4. Legal Requirements

5. Form of Ownership

6. Financial Plan

7. Organization, Management & Staffing Plan

8. Special Considerations

1. Concept History & 1. Concept History & BackgroundBackground

– Description of Product & Service– Idea History – Summary of Experience

2. Goals & Objectives2. Goals & Objectives

• Short Term & Long-Term Goals

• Example: Work part time while planning a new business, then at the end of one year quit my other job & devote all of my efforts to opening & managing the new business.

3. Marketing Plan3. Marketing Plan

A. Consumers & Demand

B. Competition

C. Geographic Market

D. Pricing Policy

A. Consumers & DemandA. Consumers & Demand

Profile Costumer:

Age

Income

Occupation

Family status

Estimation: how often a typical costumer will want to buy the product or service & at what

price.

B. CompetitionB. Competition

“A rivalry between companies that sell similar products/services”

C. Geographic MarketC. Geographic Market

• A crucial step in planning a business. • Correctly identifying the geographic market

makes setting realistic sales goals easier.

D. Pricing PolicyD. Pricing Policy

A carefully considered pricing policy can help you achieve your sales & profit

goals

4. Legal Requirements4. Legal Requirements

• Entrepreneurs should determine • What patents• Copyrights• Agreements• Contracts• Or other legal arrangements

will be need to carry out day-to-day business

5. Form of Ownership5. Form of Ownership

• Sole Proprietorship • Partnership • Corporation

Sole ProprietorshipSole Proprietorship

“ A business established, owned, and controlled by a single person”

Advantages of Sole Advantages of Sole ProprietorshipProprietorship

• Simple to start• No formal action is required • Started immediately • Total control • Receive all the profit • Income tax as an individual only

Disadvantages of Sole Disadvantages of Sole ProprietorshipProprietorship

• Unlimited responsibility for losses, debts, and other liabilities

• The owner must make all the decisions • The owner is the only person who can

arrange financing or capitalization • Business ends upon the owner’s death

PartnershipPartnership

Partner“individuals who voluntary agree to conduct a

partnership” General Partnership

“A partner who actively engages in the day-to-day management of the business & is fully liable for any

actions for, by, & against the business” Limited Partnership

“A partner who does not actively engage in day-to-day management of the business & has liability limited to

extend of his or her investment in the business”.

Advantages of PartnershipAdvantages of Partnership

• Start-up can be simple • Pays no income tax • Partners share responsibilities of

decision making, management, & capitalizing the business.

• Partners share any & all liabilities• Liability is limited in the limited

partnership

Disadvantages of PartnershipDisadvantages of Partnership

• High percentages of partnership break-up• Partners carry unlimited financial liability • Each partner carries liability for the errors of

his or her partners• Partners, potentially, have less control due to

shared decision making & shared management • Partners must share profit • Partnership termination may disrupt business

CorporationCorporation

“A legal entity created by law” Advantages:

• Limited Liability • Ability to raise capital • Continuity of business • Transferable ownership

Disadvantages: • Double taxation • Charter costs • Regulation

• Lack of control

6. Financial Plan6. Financial Plan

– Initial Capitalization Plan – Projected Income Statement – Projected Operating Expenses – Cash Flow Projection

7. Organization, Management & 7. Organization, Management & Staffing PlanStaffing Plan

– Organization Chart – Employee Requirements– Resumes – Personal Financial Statements– References

8. Special Considerations8. Special Considerations

– Production & Manufacturing Needs – Facility Needs – Education & Training Needs – Land & Utility Needs – Research & Development