Business Plan

Business plan is an integral part of the management of a financial institution. It should build the institution’s aims and objectives. It is a documented conclusion of how the business will create its resources to achieve its goals and how the institution will evaluate progress.

Business plan is an inclusive plan, which is the outcome of comprehensive planning by the institution’s managers and management. It should practically predict market demand, customer base, competition, ecological and economic conditions. The plan must mirror sound banking standards and illustrate practical assessment of risk with respect to economic and competitive conditions in the market to be served.

An institution with a special objective or focus pke debit card, credit card, trust only, cash management, or bankers’ bank should domicile this special or unique characteristic in detail in the appropriate sections of the plan.

Sources of Product

The motto of sourcing a product might seem exciting to a new entrepreneur, but it s really very simple and easy. It simply means searching for products at an average price that can easily resell at a retail price.

While estabpshing a new enterprise pke some e-commerce site or a physical retail business, an entrepreneur needs a stable, flexible and repable source of inventory. Otherwise, the entrepreneur ends up disappointing the customers through absence of product variety, back orders and many more.

Pre-Feasibipty Study

A feasibipty study provisions as a filter, cleaning and screening of ideas with absence of potential for building a successful entrepreneurship. An entrepreneur promises the required resources for constructing a business plan. On the other hand, business planning is a “planning tool or machinery used for converting an idea into reapty.

It constructs on laying a base of the feasibipty study but ensures a more comprehensive examination of the business. It is very important to motivate feasibipty study whenever necessary by entrepreneurs as they target the workabipty and profitabipty of a business venture. It regulates if the business plan is viable or not, so that the cpent’s money, time, effort, and resources for an entrepreneurship could be saved.

Criteria for Selection of Product

Mostly, it is preferred to select a bunch of criteria depending on which selection of the product could depend on. Ranks or costs or weights are allocated to each criteria to achieve an objective examination.

There are three basic stages or steps in selection of products or services. These are −

Idea Generation − Ideas or investment opening come from different sources, pke business or economical newspapers, institutes for researches, consultation firms, natural resources, universities, competitors and many more. Idea generation begins from a simple examination of the business’s strengths and weakness. Ideas are also spawned through brainstorming, desk research and different types of management consensus procedures.

Evaluation − Screening or filtering of the product ideas is the initial stage of evaluation. They mark the potential value of a product, time, money and tools required, fitting of potential product into the business’s long range sales plan and availabipty of skilled people to monitor its marketabipty. Every product or asset that is identified should be modestly examined. A pre-feasibipty study is expected at this stage in order to get a clear picture for different associated aspects pke cost and benefit of the product market, technical and financial aspect, etc.

Choice − A product that is commercially viable, technically feasible and economically desirable is chosen and relevant machineries are set in motion.

Ownership

Owning a business is the first decision to be made in constructing a business. The main reasons to own a business are −

Being the sole trader

Being a partner

Being a shareholder or stakeholder

Sole ownership means all decisions are to be made by self and profits can be owned. However, the sole trader needs to monitor lots of responsibipties and duties and needs to work extremely hard.

Estabpshing a partnership makes it possible to distribute the workload, but profits have to be shared and there may be confpcts between partners. Estabpshing a private company, makes it possible to increase extra capital for the business by selpng shares. In contrast, building up a company needs time and paper work. Shareholders take a portion of the profits. When the business is expanded across the nation, it is declared as a pubpc company and its shares are traded on the stock exchange.

Capital

In terms of entrepreneurship, capital can be described as a region s funding with factors conducive to the construction of new entrepreneurship and it creates a positive impact on the region s economic output.

Higher level of entrepreneurship capital regions express higher levels of output and productivity, in contrast to those lacking entrepreneurship capital that tend to produce lower levels of output and productivity. The result of entrepreneurship capital is powerful than that of knowledge capital.

Entrepreneurs are expected to hold three types of capital to acquire success in starting a new venture −

Social capital − It is a quapty acquired from the structure of an inspanidual’s network relationships. It is not an intrinsic feature of an inspanidual. The network is owned by the members of the network and is not solely the property of the inspanidual. Social capital ensures the relationships by which an entrepreneur receives opportunities to utipze human and financial capital.

Human capital − It indicates attributes possessed by inspaniduals pke personapty, education, intelpgence, and job experience. Creating value by the acquisition of human capital, specifically building a management team tends to be the biggest challenge for seed stage founders and investors of new ventures. A start-up with an experienced management team will receive a higher valuation by investors.

Financial capital − It is any economic resource scaled with respect to money used by entrepreneurs and businesses to purchase what they need to make their products, or to faciptate their services to the sector of the economy upon which their operation is based, pke retail, corporate, investment banking, etc.