Internal And External Sources Of Finance For A Limited Company How To Evaluate A Business Idea For Developing An Enterprise

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How To Evaluate A Business Idea For Developing An Enterprise

Why Do You Need a Business Plan?

Planning is a never ending process for all businesses. This is especially important in the early stages of any venture when the entrepreneur needs to prepare a preliminary business plan.

There are different types of plans that may be part of every business operation. This includes but is not limited to Financial plans, Marketing plans, Human Resources plans, Production plans, Sales plans, etc. Plans may be short term or long term or may be strategic or operational. Regardless of the type of plan or function, plans serve one important purpose; to provide guidance and structure to management in a rapidly changing market environment.

A business plan on the other hand is a written document prepared by the entrepreneur which describes all the relevant external and internal elements involved in starting a new venture. This is often the integration of functional plans such as marketing, finance, manufacturing, and human resources. It also addresses short and long term decision making for the first three years of operations. So, a business plan, or roadmap, answers the strategic question where am I now? Where am I going? And how do I get there? Potential investors, suppliers, and even customers will ask for or need a business plan.

How Do I Prepare My Initial Project Proposal

In my case I followed the breakdown below keeping each section as short as possible.

1. Background: in this section, I set the context of the project by providing a description of the problem it’s trying to address.

2. Sophistication: I provide an overview of existing and emerging technologies in the field, including a description of competing technologies and a comparison of the advantages and disadvantages of various options.

3. Proposal: I write an overview of the proposed project and its approach, i.e. the activities I will undertake to achieve the project objectives. Clearly define the research element or novelty component in the proposal.

4. Consortium: overview of the proposed workforce and defines the capabilities required to implement the project successfully (eg skills, competencies, etc.)

5. Objectives and Deliverables: Identification of (1) objectives and (2) proposed project outcomes.

6. Competitiveness: if any, determine the competitiveness or superiority of the proposed solution compared to other solutions, both existing and those that are still being researched.

7. Cost: provides an overview of the project cost (including start-up costs and working capital requirements).

8. Impact: this section should cover:

I. Markets and Uses: identify possible uses and markets for project delivery.

ii. Beneficiaries and Beneficiaries: identification of beneficiaries of project outcomes (eg project participants, general public, third parties) and how they will benefit.

I, I, I. Roadmap: provides an indication of what further steps, effort, cost and timeframe are required before tangible benefits can be realized from project deliverables or deliverables (unless these are realized within the life of the project).

iv. Spillover Benefits: identifying secondary benefits of the project (e.g. facilitating participation in a funding program, improving Malta’s rating, strengthening Malta’s reputation in certain areas, etc.)

Prepare a Detailed Business Plan

The stages of writing a business plan are: After deciding to enter the business world, before starting a business and when renewal is needed.

Business plans can be written for retail businesses, wholesale businesses, service businesses, manufacturing, and other types of businesses.

A business plan is written by doing the following:

Identify all the questions that can be asked about the business.

Determine what further information needs to be collected to answer all questions.

Obtain all necessary information.

Compare various alternatives

Make a decision on each question.

The business plan must:

Have a good appearance

Provide an index

Give a summary

Number each copy

Signed to show who sent it.

Depends on the nature of the business.

The business plan must be organized to contain a cover page, table of contents, executive summary, business description, marketing plan, organizational plan, operating plan, financial plan and annexes.

The outline of a typical business plan is as follows;

1. Title: Feasibility Study Report on______________________

Commissioned by____________

2. Project consultant

3. Table of contents:

Business plan summary

Report

Project Background

Study objectives

Project description and

Loan progress

Promoter

Location

Market and marketing plan

Potential customers

Competition

Price

Sales Tactics

Advertising and promotion

Distribution.

Technical feasibility and management plan:

Factory

Machine

overhead costs

Packaging material

Labor raw materials and labor costs.

Projection/Financial Feasibility:

General description of capital requirements

Financial plan

Projected cash flow

Projected profit and loss account

Balance projection

Break-even analysis

Sources and application of funds

Organization Plan:

Form of ownership

Identify key partners/shareholders

Principal’s Authority.

Management team background

Roles and responsibilities of organizational members

Risk Assessment:

Evaluate business weaknesses

New technology

Emergency plan.

Timetable:

12 month sales projection

12 month purchase projection

Fixed Assets and depreciation schedule

profitability index.

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