Aneesh, a young entrepreneur, wishes to take his family business of designer fabrics to greater heights with the knowledge he has acquired at 'National Institute of Fabric Development'. His father gave him ₹ 25 lakh as a seed capital to start his own new product line under the family business.
Aneesh is venturing into leather and faux leather for which he needs to plan his business before he goes ahead with the execution. He knows that transformation of raw material into finished products takes place with the help of energy, capital, manpower and machinery. Further, he realised that manufacturing operations are highly complex and tedious, hence need to well planned.
(a) Identify the component of business plan Aneesh is discussing about. Also state its objective. (b) Explain the three different options available before the venture.

Question

Aneesh, a young entrepreneur, wishes to take his family business of designer fabrics to greater heights with the knowledge he has acquired at 'National Institute of Fabric Development'. His father gave him ₹ 25 lakh as a seed capital to start his own new product line under the family business.

Aneesh is venturing into leather and faux leather for which he needs to plan his business before he goes ahead with the execution. He knows that transformation of raw material into finished products takes place with the help of energy, capital, manpower and machinery. Further, he realised that manufacturing operations are highly complex and tedious, hence need to well planned.

(a) Identify the component of business plan Aneesh is discussing about. Also state its objective. (b) Explain the three different options available before the venture.

Accepted Answer

(a) The component of the business plan discussed by Aneesh is the **Production Plan**. Its objective, as quoted by Alford and Beathy, is 'picturising ahead every step in a long series of separate operations, each step to be taken in the right place, of the right degree, and at the right time, and each operation to be done at maximum efficiency'. The production plan helps the entrepreneur understand the production schedule and budget, machinery and equipment requirements, manufacturing method and process involved, plant layout, time, motion and work study, manpower and inventory requirements.

(b) The three options available before the venture are: (i) **No manufacturing involved** — if the venture is a trading firm or service provider, this section of the production plan is eliminated; (ii) **Partial manufacturing** — if some or all manufacturing is subcontracted or outsourced, the plan should describe the name and location of the subcontractors, reasons for their selection, the cost and time involved, and any completed contracts, along with a clear mention of what the entrepreneur does internally versus what is outsourced; (iii) **Complete manufacturing** — if manufacturing is done entirely by the entrepreneur, the plan should describe the physical plant layout, machinery and equipment required, raw materials and suppliers (names, addresses, terms), cost of manufacturing, and future capital equipment required.