Unit 5 Business Proposals, Plans, and Reports (BBS, BBM III)

 Unit 5 Business  Proposals, Plans, and Reports

What is a Business Plan?: A business plan is a written document that describes in detail how a business defines its objectives and how it is going to achieve its goals that shows a written roadmap for the firm from marketing, financial, and operational viewpoints, and is more than a document. It’s a guide that helps companies or investors outline and achieve their goals. Business plans can help the person or a company get funding or bring on new business partners. Investors want to they will see a return on their investment. So,, a business plan persuasive document that a person or a team, or a company will use to convince investors to invest. 2 types of Business Plans are:

a.      Traditional Business Plan: This type of plan is very detailed, takes more time to write, and is comprehensive. Lenders and investors commonly request this plan. Traditional business plans are useful for established businesses if the owners want to add more business to their existing business or they want to request financing from traditional sources.

b.      Lean Startup Plan: This type of plan is high-level focused, fast to write, and contains key elements only. Some lenders and investors may ask for more information after reviewing this plan, this plan is more useful for startup companies or if you want to highlight your business quickly, your business is relatively simple, or you plan to regularly change and refine your business plan.

Major Components of Business Plan:

i.                    Executive Summary: An executive summary is one of the most crucial sections of the business plan. The purpose of an executive summary is to distill everything and give a clear and concise overview of your business that persuades the reviewers or the investors to read it further. If the business plan is for the company’s internal use, an executive summary can be skipped. A comprehensive business plan’s executive summary should include Business concept: What does your business do?, Business goals and vision: What does your business want to do? Product Description and Differentiation: What do you sell, and why is it different? Target market: Who do you sell to? Marketing strategy: How do you plan on reaching your customers? Current financial state: What do you currently earn in revenue? Projected financial state: What do you foresee earning in revenue? How much money are you asking for?

ii.                  Company Description: This section of your business plan should answer two fundamental questions: who are you, and what do you plan to do? Answering these questions introduces: why you’re in business? Why you’re different? What do you have going for you? And why you’re a good investment? Some of the components you should include in your company overview, Your business structure, Your business models, Your industry, Your business’s vision, mission, and value proposition, Background objectives, both short and long-term, Your team, including key personnel and their salaries, etc.

iii.                Market Analysis: Market analysis is a key section of the business plan. It should include an overview of how big you estimate the market is for your products, an analysis of your business’s position in the market, and an overview of the competitive area. Thorough research supporting your conclusions is important both to persuade investors and to validate your business ides. The market analysis focuses on following questions How big is your potential market? How many people need your product or use your services? Many companies or individuals use SWOT analysis for market analysis.

Strengths:  Previous experience growing e-commerce business,  Strong management, experience, Patented product, Exclusive deal with manufacturing company.

Weakness: No team management experience, and Breakable product, making shipping more expensive.

Opportunities: Strong growth in product category sales, No market leading in category; many smaller firms,

Threats: Regulation pending for product category in international markets

iv.                Competition Analysis: Competition analysis helps to create a market gap for the business being proposed.  A business will sooner or later have competition in the market. It applies even with an innovative product. So, it’s important to include a competitive overview in the business plan. If you’re entering an established market, include a list of a few companies you consider direct competitors and explain how you plan to differentiate your products and business from theirs.

Three primary factors differentiate your business in the face of competition:

Cost Leadership: You can maximize profits by offering lower prices than the majority of your competitors.

Differentiation: Your product or service offers something distinct from the current cost leaders in your industry and banks on standing out based on your uniqueness. Segmentation: You focus on a very specific, or niche (a special area of the market, a specialized section of the market), target market, and aim to build traction with a smaller audience before moving on to a broader market.

Management and Organization: This section of your business plan should tell readers about who’s running your company. Detail the legal structure of your business. Communicate whether you’ll incorporate your business as a corporation or create a limited partnership or sole proprietorship.

If you have a management team, use an organizational chart to show in the chart your company’s internal structure, including the roles, responsibilities, and relationships between people. Communicate how each person will contribute to the success of your startup.

Products and Services: Your products or services will feature prominently in most areas of your business plan, but it’s important to provide a section that outlines key details about them for interested readers. If you sell many items, you can include more general information on each of your product lines; if you only sell a few, provide additional information on each.

Describe new products you’ll launch shortly and any intellectual property you own. Express how they’ll improve profitability.

Customer Segmentation: Your ideal customer, also known as your target market, is the foundation of your marketing plan. You’ll want to keep the customer in mind as you make strategic decisions, which is why an overview of who they are is important to understand and include in your plan.

To give a overall overview of your ideal customer, describe several general and specific demographic characteristics. Customer segmentation often includes Places the customers live, Their age ranges, Their level of education, some common behavior pattern, how they spend their free time, Where they work, What technology they use, How much they earn, Where they’re commonly employed, Their values, beliefs, or opinions

Marketing and Sales Plan: Your marketing efforts are directly connected to your ideal/potential customers. Your plan should outline your current decisions and your future strategy, with a focus on how your ideas are a fit for that ideal customer. Most marketing plans include information on four key subjects.

1. Price: How much do your products cost, and why have you made that decision?
2. Production: What are you selling and how do you differentiate it in the market?
3. Promotion: How will you get your products in front of your ideal customer>
4. Place: Where will you sell your products?

Logistics and Operations Plan: Logistics and operations are the workflows you’ll implement to make your ideas a reality. If you’re writing a business plan for your own planning purposes, this is still an important section to consider, even though you might not need to include the same level of detail if you were seeking investment. Cover all parts of your planned operations, including:

1. Suppliers: Where do you get the raw materials you need for production, or where are your products produced?
2. Production: Will you make, manufacture, wholesale, or drop ship your products? How long does it take to produce your products and get them shipped to you? How will you handle a busy season or an unexpected spike in demand?
3. Facilities: Where will you and any team members’ work? Do you plan to have a physical retail space? If yes, where?
4. Equipment: What tools and technology do you require to be up and running? This includes everything from computers to light bulbs and everything in between.
5. Shipping and fulfillment: Will you be handling all the fulfillment tasks in-house, or will you use a third-party fulfillment partner?
6. Inventory: How much will you keep on hand, and where will it be stored? How will you ship it to partners if required, and how ill you approach inventory management?

Financial Plan: No matter how great your idea is a business lives or dies based on its financial health.

At the end of the day, people want to work with a business they expect good returns and a future.

The level of detail required in your financial plan will depend on your audience and goals, but typically you’ll want to include three major views of your financials: an income statement, a balance sheet, and a cash-flow statement.

It also may be appropriate to include financial data and projections.

1. Income statement: Your income statement is designed to give readers a look at your revenue sources and expenses over a given period. With those two pieces of information, they can see the all-important bottom line or the profit or loss your business experienced during that time. If you haven’t launched your business yet, you can project future milestones of the same information.
2. Balance sheet: Your balance sheet offers a look at how much equity you have in your business. On one side, you list all your business assets (what you own), and on the other side, all your liabilities (what you owe). This provides an overview of your business’ shareholder equity.
3. Cash Flow Statement: your cash flow statement is similar to your income statement, with one important difference: it considers when revenues are collected and when expenses are paid. When the cash you have coming in is greater than the cash you have going out, your cash flow is positive. When the opposite scenario is true, your cash flow is negative. Ideally, your cash flow statement will help you see when cash is low, when you might have a surplus, and where you might need to have a contingency plan to access funding to keep your business solvent.

Common Mistakes

1. Unrealistic business idea: Not every idea is going to win. Sometimes your idea may be too risky and you won’t be able to get funding for it. Other times it’s too expensive or there’s no market. Your business ideas should be SMART: specific, manageable, achievable, reasonable, and time-bound.
2. No exit strategy: Investors reading your business plan want to know one thing: will your idea make them money? If you don’t show an existexistingtegy or a plan for them to leave the business with maximum profits, you’ll have little chance to get investment.
3. Unbalanced teams: A great product is the cost of entry to starting a business. But an incredible team will take it to the top. Unfortunately, many business owners overtook a balanced team. They assume readers want to see potential profits, without worrying about how you’ll get it done. If you’re pitching a new software idea, it makes sense to have at least one developer or IT specialist on your team.
4. Missing financial projections: Your numbers are the most interesting part for readers. Don’t leave out your balance sheet, cash flow statements, P&L statements, and income statements. Include your break-even analysis and return-on-investment calculations to create a successful business plan.
5. Spelling and grammar errors: Some businesses think hiring a professional editor is overkill. The reality is, all the best organizations have an editor review their documents. If someone spots typos while reading your business plan, how can they believe you’ll run a successful company?

Tips for Creating a Small Business Plan

1. Know your audience: When you know who will be reading your plan- even if you’re just writing it for yourself to clarify your ideas- you can tailor the language and level of detail to them. This can also help you make sure you’re including the most relevant information and figure out when to omit sections that aren’t as impactful.
2. Have a clear goal: You’ll need to put in more work and deliver a more thorough plan if your goal is to secure funding for your business versus working through a plan for yourself or even your team.
3. Invest time in research: Sections of your business plan will primarily be informed by your ideas and vision, but some of the most crucial information you’ll need requires research from independent sources. This is where you can invest time in understanding who you’re selling to , whether there’s demand for your products, and who else is selling similar products or services.
4. Keep it short and to the point: No matter who you’re writing for, your business plan should be short and readable- generally no longer than 5 to 6 pages. If you do have additional documents you think may be valuable to your audience and your goals, consider adding them as appendices.
5. Keep the tone, style, and voice consistent: This is best managed by having a single person write the plan or allowing time for the plan to be properly edited before distributing it.

Business Reports: A report is written for a clear purpose and to a particular audience. Specific information and evidence are presented, analyzed, and applied to a particular problem or issue. The information is presented in a clearly structured format making use of sections and heading so that the information is easy to locate and follow. Similarly, a report must follow specific format or structure.

Types of Reports

1. Informational reports: These reports present facts about certain given activities in detail without any note or suggestions. Whatever is gathered is reported without giving explanations or suggestions. A vice-chancellor asking about the number of candidates appearing at a particular examination naturally seeks only information on the fact without any comment. Generally, such reports are of routine nature. Sometimes, they may fall under the statutory routine category.
2. Analytical reports: These reports contain facts along with analytical explanations offered by the reporter. Such reports contain the presentation of facts, collected data and information, classified and tabulated data, and also explanatory notes followed by the conclusions arrived at or interpretations. A company chairperson may ask for a report on a falling trend in sales in a particular area. In this case, the chairperson will naturally be interested in knowing all the details including opinion of the investigator about that sales trend.
3. Statutory reports: These reports concern with a particular law or a rule. For example, a company has an auditor to report the financial activities to fulfill the legal requirements. Similarly, a return on compensation paid to factory workers during a period by a factory has to be submitted to concerned authorities periodically. These reports are generally prepared in the prescribed form as per the rules.
4. Routine reports: These reports are required to be prepared and submitted periodically on matters required by the organization that helps the management of the organization to take decisions in matters relating to day-to-day affairs. The main objectives of routine reports are to let the management know what is happening in the organization, what is its progress where the deviation is , what measures have been taken in solving the problems, and what to do so that the organization may run smoothly and efficiently. Routine reports are generally brief. They only give the facts. No comments or explanations are usually offered in such reports. Generally, forms are prescribed for the preparation and submission of such reports.
5. Special reports: Such a type of report is especially required to be prepared and submitted on matters of special nature. For example, an accident has occurred in a factory. The factory manager may ask for a detai l report of the accident. Such a report is classified as a special report. These reports basically contain not only facts and details but may contain suggestions, comments, and explanations as well.

Typical Report Formats

1. Letter format: Letter format is usually used for short informal reports. It is usually eight or fewer pages long, and such reports are not usually sent to the audiences outside the organization. Prepared on office stationery, a letter report contains a date, inside address, salutation, and complimentary close. Although they may carry information similar to that found in correspondence, letter reports usually are longer and have more careful organization than most letters. They can include headings also.
2. Memo and e-mail formats: Memo format is appropriate for short informal and informational reports if the information is supposed to be circulated within a particular organization only. The memo reports begin with essential background information, using standard headings; Like letter reports, memo reports differ from regular memos in length, use of headings, and deliberate organization. Memos are distinguished by a header that includes DATA, TO, FROM, and SUBJECT lines. Other lines, such as CC or BCC, may be added as needed. An “RE” (for “Reference”) line may be used instead of SUBJECT, but this use is becoming rater as “RE” is often mistaken as “Reply” because of its use in email. Today, memo reports are rarely distributed in hard copy. Also, they are attached to e-mails or sent as attached filmiest Instant Message.
3. Forms and templates: Traditionally, reports were submitted as forms filled. The companies designed a certain form required for specific types of information. In this format, the workers fill the forms with obtained data and submit it to the concerned departments or bodies of the organization. Repetitive data, such as monthly sales reports, performance appraisals are submitted in personnel and financial reports using Forms and Templates. Today, such forms are available digitally. Employees can customize the templates and forms and print them out or distribute them electronically. Standardized headings on these forms save time for the writer. Forms make similar information easy to locate and ensure that all necessary information is provided.

Components of Formal, Long Reports

• Longer, more formal reports require the manuscript format. These reports are usually printed on plain paper instead of letterhead stationery or memo forms. They begin with a title followed by systematically displayed headings and subheadings. Generally, the basic components of formal long reports have three sections: Front Matter, Body Matter, and Back Matter.

Front Matter

1. Title page: The formatting of the title page may vary, depending upon your company’s requirements.

Ø  Include the full title of the report.

Ø  The title should reflect the topic, scope, and objective.

Ø  Include “feasibility” or “annual report” in the title or subtitle.

Ø  Do not abbreviate in the title.

Ø  Put the period in the subtitle.

Ø  Include the names and titles of the writers, investigators, and compilers.

Ø  Include the dates and the period represented by the report.

Ø  Include the name of your organization.

Ø  Provide the name of the company or individual receiving the report.

2. Table of contents (TOC): The table of contents provides the reader with a list of headings and page numbers for each section of the report.

Ø  Use Roman numerals.

Ø  All chapters and section titles in the report should match the TOC.

Ø  Provide listings for major and subordinate headings that are separated by typeface and indentions.

3. List of figures: A list of figures is used when a report contains more than five figures.

Ø  List figures by title and page number.

Ø  Number figures consecutively with Roman numerals.

Ø  A list of tables is used if there are more than five tables in your report.

Ø  Number tables consecutively in Arabic numbers.

Ø  Letter of transmittal or cover letter: A letter of transmittal announces the report topic to the recipient(s). If applicable, the first paragraph should identify who authorized the report and why the report is significant. Provide the purpose of the report in the first paragraph as well. The next paragraph should briefly identify, categorize, and describe the primary and secondary research of the report. Use the concluding paragraph to offer to discuss the report; it is also customary to conclude by thanking the reader for their time and consideration. Observe the following letters of transmittal:

5. Acknowledgements: A page of acknowledgments is usually included immediately after the Table of Contents. It contains the gratitude and thankfulness of the authors/organizations to the persons, organizations for their help in carrying out the reports. Acknowledgments come in an order of respect. The following list includes those people who are often acknowledged:

Ø  Main supervisor

Ø  Second supervisor

Ø  Other academic staff in your department

Ø  Technical or support staff in your department

Ø  Academic staff from other departments

Ø  Other institutions, organizations, or companies

Ø  Past students

Ø  Family *

Ø  Friends *

6. Abbreviations and acronyms: This is used to clarify abbreviations and acronyms used in the reports. The list is arranged in an alphabetical order.
7. Abstract/executive summary: An executive summary presents an overview of the report that can be used as a time-saving device by recipients who do not have time to read the entire report. The executive summary should include:

Ø  Summary of purpose

Ø  Overview of key findings

Ø  Identification of conclusions

Ø  Overview of recommendations

Body of Reports

1. Introduction: The body of a formal report begins with an introduction. The introduction sets the context for the issue to be developed or analyzed or investigated or solved in the report. Similarly, it clarifies what need(s) motivated it, and helps the reader understand what structure the report will follow.  The introduction of report addresses the following elements:

1. Background information
2. Purpose of the report
3. Significance
4. Scope
5. Methods and sources
6. Organization

2. Discussion: This section presents the evidence for conclusions. This key section can be organized with headings and subheadings according to the data received. This section needs its own internorganizationalion style. For example, according to the nature othe f report, following internal organization patterns can be used:

Ø  Analytical: existing situation, solution, benefits

Ø  Product specifications of mechanisms, facilities, or products

Ø  Comparison/contrast of options

Ø  Process

Ø  Features of the systems or products

Ø  Step by step instructions for completing tasks

3. Conclusion: The key results from the analysis are in the discussion and findings section. Up to this point, readers have carefully reviewed the data in the report; they are now logically prepared to read the report’s conclusions and recommendations. In the short, conclusion section:

Ø  Pulls the report together.

Ø  Comes out of the findings discussed in the body of the report.

Ø  Provides the significance of the report.

Ø  Provides recommendations for future actions.

Back Matter: Back matter contains all supplementary documents including ing following items:

References: It is the list of all the resources cited (used) while writing the report. Consider the following guidelines:

Ø  Cite any and all sources that you have summarized, paraphrased, or quoted.

Ø  Cite any figures that you have used as a source and any data used to create graphs or charts.

Ø  Follow the citation style that your company/institution uses (APA, MLA., Chicago, Oxford etc.)

Ø  Place the Reference page at the end of the body

Ø  Arrange the lists of sources in alphabetical order

Appendices: The appendices are supplementary documents or documents containing additional information that cannot be adjusted or included in the main body of the report but have been used. Appa indices questionnaires andiresand , maps. Pictures, figures, long tables and figures etc.

Ø  The first page of the appendix is placed on a new page after the reference

Ø  Label the individual appendices as Appendix A, Appendix B, etc.

Glossary: The glossary is the alphabetical listing of definitions of terms that you have used in your report.

Ø  Define the terms concisely and simply.

Ø  Each entry should begin on a new line.

Ø  Even though you use a glossary, you should include definitions for uncommon terms within your text.

Editing and Proofreading: Check through your wfork for style and correctness.

Ø  Clarified the purpose and audience?

Ø  Selected the most appropriate text type?

Ø  Used the correct format?

Ø  Explained the purpose of the report?

Ø  Defined the problem?

Ø  Included all the information needed?

Ø  Deleted unnecessary information?

Ø  Presented factual and objective information?

Ø  Organized the information logically and clearly?

Ø  Formatted appropriate headings and subheadings?

Ø  Written language appropriate to the purpose and audience?

Ø  Check spellings and grammar?

Business Proposal

• A proposal is a written offer to solve problems, provide services, or sell products.
• Proposal is essentially a persuasive document that is written at the earlier stages to convince the concerned person or department or organization about a product, service or a project.
• The aim of a proposal aims to convince.
• A proposal recipient could be a manager inside your company or a potential client outside your company. All types of proposals share two significant characteristics:

1. They use easy-to-understand language, and
2. They show the value and benefits of the product or services being recommended.
3. Proposals can be informal or formal, internal or external, and solicited or unsolicited.
4. Informal proposals are like short reports, usually used inside the companies. As the writer and audience know each other, the tone and language tend to be informal and relaxed. Formal proposals like formal reports are written outside the organization and follow all the guidelines for writing proposals.
5. Internal proposals are prepared and used within the organization. In business organizations, an executive may write a proposal to the management requesting change or approval of funds. An external proposal is prepared and used for external purposes to the people outside the organization. They are generally written in response to the RFP and they follow the specific requirements demanded by the organizations.
6. Almost all proposals can be solicited and unsolicited.

• A solicited proposal is written and submitted when it is requested by organizations, institutions,      or government bodies to solve a problem or fulfill a requirement the request may come in the form of a direct verbal or written form.
• A solicited proposal has the following components:

1. Request for Proposal (RFP): It typically specifies the product or service, guidelines for submission, and evaluation criteria.
2. Request for Quotation (RFQ): It emphasizes cost, though service and maintenance may be part of the solicitation.
3. Invitation for Bid (IRB): Often job-specific in that they encompass a project that requires a timeline, labor, and materials.
4. Unsolicited proposals are written when the requirements are not clearly defined. Therefore, they need to be more consistent and persuasive. Similarly, they require a complete understanding of the market, customers, products/services or other related area. For example, a new school, one day, will need a library. Understanding this future need, a furniture company can submit an unsolicited proposal for proposing the suitability and importance of its furniture products.

Proposal Formats

• Like reports, business proposals can have informal and formal formats.
• Informal proposals are usually written in letter or memo formats.
• They contain only the important elements. For example, they do not have elements like title pages, executive summaries, or appendices.
• They are simply organized intersections: Introduction, Body, and Close.
• However, informal proposals can be more detailed and extensive sometimes. In such cases, they include:

Ø  An introduction or description of the problem

Ø  Relevant background information or a statement of need.

Ø  The proposal benefits and schedule for completion

Ø  Requirements

Ø  A budget analysis

Ø  A conclusion that may include an authorization request.

Proposal Content/Structure

The Prefatory Part (Front Matter)

1. Title page
2. Cover letter
3. Table of contents and illustrations
4. Acknowledgements
5. Summary/abstract

The Body

1. Introduction

1. Purpose/objective
2. Background
3. Statement of the problem/need analysis
4. Scope
5. Procedures
6. Benefits

2. Discussion

1. Task schedule
2. Cost estimate
3. Expected result
4. Credentials

3. Conclusion

Appended Part (Back Matter)

1. References/bibliography
2. Glossary
3. Appendix
4. Index