How To Write A Bankable Business Plan (Series 3)

Series 1 - Introduction and Front page of a Bank Business Plan

Series 2- Executive summary, Description & Marketing plan

Series 3- CONTINUATION & Conclusion

 

PRODUCTION PLAN

1. Here you explain the why?

• Minimize costs/maximize profit
• Maximize customer services
• Minimize changes in production rates
• Minimize inventory investment
• Minimize changes in work force levels
• Minimize the utilization of plant and equipment

2. Guiding Rules

• Production process- steps involved (diagram if possible) and critical decision required
• Required building and machinery-(fixed assets and associated cost)
• What is the useful lifespan of the building and machinery: Depreciation schedule
• How will the maintenance be done and are spare parts locally available?
• When and where can the machinery be obtained.
• How much capacity will be utilized?
• When and how will the machinery be paid for?
• What are the sources of raw materials and are they available throughout the year
• Where will the factory be located and how will it be arranged?
• How much raw materials are required?
• How much will the raw material cost

3. Labour

• How many direct and indirect labour are needed and what skills should they have?
• What will be the cost of labour ?
• How will the workers be motivated?
• What factory overhead expenses are involved?
• What is the production per unit?
• Clearly list all production cost
• Possible Constraints to production and contingency plans

4. Other Production Plans

• What pre-operating activities must be undertaken before the business can operate?
• What pre-operating expenses will be incurred?
• What fixed assets will be required for the office?
• What administrative cost will be incurred?

ORGANIZATION AND MANAGEMENT PLAN

1. Format:

• Form of business
• Organizational structure
• Business experience and qualifications of the enterpreneur
• Pre-operating activities
• Pre-operating expenses
• Office equipment
• Administrative expenses

 2. Guiding Questions

• How will the business be organized?
• How will the business be managed and operated?
• What is the business experience and qualification of the entrepreneur?

FINANCIAL PLAN

• Capital Requirement (Project cost)
• Start-up expenses
• Financing plan and loan requirement
• Security for loan
• Sales and cost plan
• Cash Flow

SALES AND COST PLAN (P&L ACCOUNT)

• Monthly
• Quarterly
• Annually

CASH FLOW

• Clearly explain your assumptions especially those that make the cash flow differ from the P&L projection
• Loan repayment, equipment purchases and ownership draws do not show on profit and loss statements but definitely do take cash out... be sure to include them in the cash flow
• Depreciation do not appear  on the cashflow at all because you never write a cheque for it.

CRITICAL RISK ANALYSIS

• Optional but important
• Identify potential problems and risk
• What alternative courses of action exist?

SUSTAINABILITY STRATEGY

• Explain explicitly the orderly transfer of the venture assets should there be need for transfer of ownership
• Is there a continuity of business strategy for an orderly transition

APPENDIX

• Include all documents, drawings, agreements, or other materials needed to support the plan
• You could also include names of references, advisors or technical sources
• Are there any supporting documents missing?

Follow through our outline steps and we assure you that no financial institutions would reject your proposal and business plan if it truly shows accurate figures and statements

Thanks