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IIMK EPGP:Business Plan Project (BPP-R1) 2013-14.

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Indian Institute of Management Kozhikode

Executive Post Graduate Program (EPGP)


Business Plan Project (BPP)

What is a Business Plan?

The ultimate purpose to develop a Business Plan (BP) is to have a successful business. A good BP is a document that helps raise
funds for investment in a new business conceived and so needs to address the long term needs of business and devise strategies
that enhance both the overall performance of the company as also bring personal satisfaction.
A successful business plan broadly comprises of well developed and thought out aspects of the following:

The Business Concept

What is something new in the business concept- a product, service, feature or technology? It could be same thing with
lower price or better performance, an underserved or new market, new delivery system, distribution system etc.

Understanding the Market

It is important to know how large a market exists for the product or service, is it accessible. Surveys and demographic data
can help here. Learning as much about the market when doing survey or study is important.

Industry Health and Trends

It is important to know how the macro-economic, social and political, legal factors affect business including how much
disposable income people have to buy a product, what is the impact of recession on a business. It is important to know
how is the structure of the industry in terms of how fast the industry is growing, number and size of competition, market
share, turnover etc.

Consistent Business Focus and Strategic Position

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Every successful business needs a clear strategic position that distinguishes it from competition. The strategic focus of the
business gives the long term direction of the company. A related factor is developing a corporate culture that is consistent
with its strategy. This not only aligns the company to its strategy but helps built trust among all stakeholders of the
company. The short term focus of a company is its Mission and helps align its efforts in line with its strategy.

Ability to Attract, Motivate and Retain Employees

This depends on the HR policies of the company. It ultimately refers to a companys treatment of its employees,
enrichment of job and learning opportunities. It is directly linked to employee morale that in turn affects productivity.

Financial Control

This is all about how a company handles money and refers to estimation of start up costs, cash flow management, plan for
risks and contingencies. It is also about signals that indicate dangers in financial performance and that too well in time. It is
all about prioritizing allocation of limited financial resources for most productive use. This include focus on credit policy and
broader decisions on leverage to be maintained by a company.

Anticipating and Adapting to Change

This process fist requires following signals that anticipates change and then to respond to change quickly and accurately.
Some of these changes include change in technology, sociological change, competitor change. Besides there are changes
internal to the organization including change in leadership, development of new precuts etc.

Company Values and Integrity

Only making profits does not guarantee continued success of firms. Success needs continuous definition of goals and
challenges that companies look forward to achieve. It is important not only company and its internal stakeholders well
understand its values like that of producing quality products at all costs but the same also be well understood by external
stakeholders like suppliers and customers. It is important companies maintain their integrity in all aspects of its dealings
whether suppliers or customers.

What motivates the person(s) drafting the BP to enter the business?

It is worthwhile to identify which one or more of these factors drive the entrepreneur to enter the specific business:

o Control
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o Challenge
o Creativity
o Cash
Entrepreneur needs to check how far own priorities match those of important and senior employees of the company.

Structure of Business Plan

The following components need to be part of a Business Plan:

Executive Summary:

An Executive Summary is a clear, concise condensation of a business persuading the reader to spend time understanding the
business whether he/she is a venture capitalist or a banker. This section is written last after completing the plan document. The
Executive Summary should capture if the business concept makes sense, if the business has been thoroughly planned, if
management is capable of handling the plan, if a market exists for the business and if the business incorporates competitive
advantage with realistic financial projections. The length of the summary should ideally be one side of a page (A4size) and should
not cross two sides of such a page.

Company information:

This section essentially captures the business to be in and the objective/ mission of the company in pursuing the business wi th a
name given to the company. To identify the business as a legal entity e.g. private limited company or public limited company may
also be highlighted here including the names in the management of the company, location of the business/ headquarters and the
milestones achieved so far (if any).

Industry Analysis

This section should highlight major players in the industry including its trends and strategic opportunities existing in the industry.
Most of this information should be supported with data and evidence. There needs to be a mention of the growth rate of the industry
as also its sensitivity to economic cycles and macro-economic changes like recession. The industry level information on buyers and
suppliers in the industry, regulation if any and financial characteristics of the industry need to reflect here.

The Market:

The primary focus here is to define the target market, arriving at it from demographic and segmentation detailed information and
analysis. The focus here is to make an estimate of the potential size of the market, psychographics and purchase pattern, including
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future and emerging trends if any. Here the Business Plan needs to be clear about specific customer needs to be met by the
product being sold and the distribution channel and other means to reach these customers. Customer payment plans including
inventory details and cash flows needs to be highlighted/ estimated here.

Marketing Plan:

Here the focus is on reaching customers and delivering not only product and service but also expected value to the customers. The
Marketing Plan needs to capture
How to make customers aware of products and services
Message conveyed to customers about product, service or company
Specific methods used to reinforce the message through advertising and media planning.
Securing actual sales
Essentially this section focuses on the 4-Ps of marketing namely Product, Price, Place and Promotion.

The Competition:

It is important to know who the competitors are, what their sizes are and how much market share they control. By understanding,
competitor strengths and weaknesses a Business Plan can highlight relative competitive position as also the competitor product and
service features customers prefer so as to identify ways and means to beat such competition either by identifying weaknesses or
novel ways to deliver superior value like use of internet. It is important to understand what first mover advantage competitors have
including captive customer base, factory, warehouse and distribution as also stable internal operation and supplier advantage. The
objective being to identify how a fair market share can be obtained for the new business as also create barriers to entry of new
competitors.

Operations:

This section of the Business Plan focuses on how the business is run internally. Beginning with the geographic location of facilities
including head quarters, plants,, warehouses, branch offices, showrooms (if any) etc. In production it can include details of
production plan including levels of automation, capacity utilization and productivity targets besides issues of inventory control,
supply and distribution, order fulfillment and customer service. There has to be mention of R&D activities to be undertaken
(indicative spending on R&D) and financial control. Modern issues of environmental norms, safety and insurance regulatory issues if
any need to be incorporated in this section. A sub section may be added on technology choice keeping in mind technology
development trends in the industry. Critical purchasing and vendor/ supplier development issues may also be included in this
section.


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The Management Team:

Given that people ensure success of a company this section of the Business Plan describes the organization and the key
management team members. This includes key employees, Board of Directors, Advisory Committee, Consultant and other
specialists as also key management persons to be added progressively. In defining key personnel, focus is on required skills that
these individuals need to possess, track record of these individuals as also management compensation and incentives including
bonus schemes to be offered. It is important to decide the Board of Directors structure, the nature of oversight role they will have
including the number and nature of independent members in the BOD. This section defines the Organization Structure including
reporting relationships, line of authority and informal relationships. Focus on Corporate Social Responsibility of the organization
(CSR) may also be included here although the primary focus remain fulfilling the Mission of the organization.

Personnel:

While concerning with the recruitment and retention of employees with the right skills and experience in the organization this section
focuses on developing the Human Resource Policies of the organization including meeting statutory government regulation of
Provident Fund and Pension of employees.

Financial Plan & Analysis:

This section should give the numbers supporting your Business Plan decisions. It should highlight the accounting principles to be
adopted e.g. Cash or Accrual, and in the very least make sure to include projected profit and loss and cash flow statements. Ideally
it should include principles adopted for depreciation, break-even analysis, sources and uses of funds and start-up costs. The
investor here will want to know projected cash flows and time taken to break even and register profit for the business.

Risks and contingencies:

Every business has risk of failure and so it is important to identify possible sources of this risk of failure and then to develop
contingency plans for them. Some of these risks include:

Market Risk: Market will not respond to the business product or service because there is no need for the product or the market is
not mature for it.

Competitive Risk: Possibility that competitive position will change dramatically, new competitors will enter, and basis of competition
will change

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Technology Risk: The technology currently prevalent in the industry and adopted by this business becomes completely obsolete
soon. What is the possibility of quickly adopting to the new technology?

Execution Risk: Failure to quickly roll out product to meet launch and sale target dates. It could be due to either internal operational
or external license/ permit reasons.

Capitalization Risk: Mis-calculation of funds requirement leading to cost and project capital over runs.

A preliminary analysis of the risks being faced can be done using the SWOT analysis
Strength and Weakness of the organization as matched against the Opportunity and Threats in the business environment.

Appendice:

Provide additional supporting documents that reinforce the Business Plan. This section could include:
Letters of intent/ expression to do business by potential clients
Endorsement from credible sources highlighting that the company is capable and product/ service is desirable
Photos: Of product, location, displays etc to highlight existence of a real business
Market research results: Highlighting possibility of success of proposed business
Resume of possible key managers/ leaders of the company/ promoters
Technical information if any including expertise of key managers in the technology.


While the above is not an exhaustive structure of a Business Plan, students are advised to include as much details as possible into
their business plan. Thinking through more of the details of the Business Plan and including them in the plan will not only make the
plan more robust but help secure funding and launch of the business as also better grade by helping present and defend the plan
better.
Bibliography:

The Business Plan Project (BPP) writing and presentation details including important timelines:

Nature of Assignment:

The Business Plan Project is a two (2) credit compulsory graded component of the IIMK EPGP.

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As part of this students are required to develop Business Plan in groups such that they experience the step-by-step process of
developing a business plan for a startup business. The finished project report is an operating tool to help manage a business and
enables one to achieve greater business success. Students are required to form their own group of four or five members .Each
group of student is to identify and approach a faculty member of IIMK to be their group mentor for the BPP; alternatively EPGP
office will assign a group to a faculty member of IIMK in case the group fails to identify a faculty mentor. Group members should
preferably represent multiple functional area expertise and are required to pool in their experience to draw up the BP. As an
experiential project for working executives, there are no classroom sessions. This detailed document is developed to act as a
guideline for developing the BPP. Students are free to refer to any document including net sources, however the report should
strictly adhere to the Structure of the Business Plan stated above.
Groups are requested to keep a second back-up topic for their BPP. In case of overlap of topic with other groups, BPP Co-
coordinators may request a group to change their topic.

Duration:
The Business Plan Project (BPP) begins at the start of the Second year of the EPGP. The following deadlines need to be
adhered to:

Formation of groups and submission of suggested topic in prescribed format to faculty mentor: 22 March 2014
Briefing on BPP & clarifications (Second In campus) 21-26 April 2014
Interim progress report (BPP) submitted to faculty mentor for feedback. (Soft copy in Virtual Classroom) 15 July 2014
Final date for feedback from faculty mentor to group coordinator 30 July 2014
Finalization of project report. 15 October 2014
Final report (BPP) submitted to EPGP office approved by faculty mentor (Soft copy in Virtual Classroom) 1 November 2014
Hard copy of the Final report (BPP) to reach EPGP office. (Transit time to be taken care of) 15 November 2014
Hard copy of the Final report (BPP) to be handed over to evaluation panel by EPGP Office 18 November 2014
Hard copy of the Final report (BPP) to be collected from evaluation panel by EPGP office 8 December 2014
Each group will be evaluated on the final BPP presentation. (Third In campus) Dec 2014

Evaluation:
Each group will be evaluated on the final report submitted and presentation made on the BPP by the group. The group members
along with their faculty mentor are responsible for creation of this report that will be evaluated by an independent panel as decided
by EPGP office. Besides continuous consultation, BPP groups will have an opportunity to discuss EPGP expectations from BPP
during their second in-campus module as indicated in the timeline given.

Based on the interim report, faculty mentor is to advise the group on improvements to be made. Faculty mentor is to
provide this feedback in a prescribed interim report evaluation format as provided by EPGP office. Final report is to be
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submitted to EPGP office with a cover sheet duly signed by the faculty mentor along with members of the BPP group as
acknowledgement of the final format of the report submitted. A standard template of this cover sheet will be available
with EPGP office. The submissions will follow the deadlines as stated before. Although hard copies of final report will
only be evaluated upon, BPP groups are required to submit advanced soft copies of their interim and final report as per
schedule. Regular feedback from faculty mentor may be sought on the Virtual Classroom software available for EPGP
students.

Each BPP group will be required to make a presentation on their project before a two member evaluation committee
during their 3
rd
and final in-campus visit. The presentation will be for a maximum of 20 minutes followed by 10 minutes
of questioning by evaluation panel. Earlier the same panel would have evaluated the written report submitted by the BPP
group. The written report and presentation component will each carry 50% weight. Weight given to each of the two
evaluator in the final grade will be 50%. Each BPP will finally secure a letter grade as for any course in EPGP
programme.
A letter grade awarded to a student based on evaluation of BPP will appear on the final grade sheet of the student.

In case of any deviation from the above, it should immediately be brought to the notice of BPP co-ordinator(s) and/ or the
EPGP office by both participants and faculty mentors.

Evaluation Criteria:
The evaluation of a BPP will broadly be based on the following criteria:

Format of the BPP
Executive summary
Coverage of headings/sub-headings as indicated in the Structure of Business Plan above
Details including linkages and data support for a logical flow of the report
Evaluators judgment of the feasibility of the BPP based on group presentation
Incorporation of the suggestions made by faculty mentor to the interim report in the final report
Adherence to deadlines
Proof of group cohesion- contribution of each group member to the BPP.
Any other points as found applicable.

Format of Proposal to Faculty Mentor:
The following format is to be followed:
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Title of the BPP
Name and roll numbers of group members- Group leaders name first.
Contact details of group leader
Reason for group to choose the topic
Competence of group members to draw up BPP in the subject
Sources of information
Expectations from faculty mentor
Basic write up on topic.
Alternative topic (if any) for faculty mentor to consider
The proposal will be in A4 size and not exceed two pages (4 sides) with one inch margin on all sides, 1.5 spacing and
times new roman- 12 point font.

Faculty Coordinators for BPP (2013-14):

Prof. Sumit Mitra (Sec-A) Prof. Anindita Paul (Sec-B)
Room-108, Faculty Block-I, IIMK Room- 122, Faculty Block-I, IIMK
Phone: 0495-2809108 Phone: 0495-2809122
smitra@iimk.ac.in apaul@iimk.ac.in

Reference:
http://www.score.org/resources/business-plans-financial-statements-template-gallery