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

Pre-Feasibility Study

A feasibility 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 reality.

It constructs on laying a base of the feasibility study but ensures a more comprehensive examination of the business. It is very important to motivate feasibility study whenever necessary by entrepreneurs as they target the workability and profitability of a business venture. It regulates if the business plan is viable or not, so that the client’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, like 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 availability of skilled people to monitor its marketability. Every product or asset that is identified should be modestly examined. A pre-feasibility study is expected at this stage in order to get a clear picture for different associated aspects like 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.


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 responsibilities and duties and needs to work extremely hard.

Establishing a partnership makes it possible to distribute the workload, but profits have to be shared and there may be conflicts between partners. Establishing a private company, makes it possible to increase extra capital for the business by selling 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 public company and its shares are traded on the stock exchange.


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

  • Human capital − It indicates attributes possessed by individuals like personality, education, intelligence, 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 facilitate their services to the sector of the economy upon which their operation is based, like retail, corporate, investment banking, etc.