Business Plan

PricewaterhouseCoopers
methodology

David Hodder

Laurent Vanat

The Business Plan approach developed by PricewaterhouseCoopers aims

to offer a simple and easy solution to prepare a business plan.
Thus, the approach is divided into 5 different areas:
Products / services , here the study covers what the company has to
offer and the perspectives that result
Market, addressing where the company is and will be, who are the
customers and what are their needs
Production and administrative facilities , meaning what are the
means the company has to produce and commercialise the products /
services it has to offer, what administrative facilities are available
Staff and management , which needs to be assessed properly to
guarantee the company will have the right people in the right place
Finances , the final translation into monetary units of all the
company's perspectives and the financial needs and dividends that
may result

For each area, a 6 step approach has been defined to help collect the
information and study the relevant issues:
information
de base

Aspects
particulers
analyser

Facteurs
de succs

Risques et opportunits

Indicateurs-cls

Synthse
prsenter

Basic information to be collected , with suggestion of some

supporting documents and other information sources
Focus on special issues , which points out major aspects that
may need in-depth analysis
Success factors , where concentration of the efforts of the
company are necessary
Risks and opportunities , featuring and anticipation of the major
threats and opportunities for the company
Key indicators , supplying the essential figures related to the area
covered and their evolution over the future years
Overview, with a short indication of the basic content of the
summary that should be presented for the study area

This Business Plan approach can therefore very simply be summarised

into a matrix combining the study areas and the different steps to be
followed on:

Information
de base

Aspects
particuliers
analyser

Facteurs
de succs

Risques et
opportunits

Synthse
prsenter
Indicateurs-cls

Each page of the survey outline matches with one of

the boxes of the matrix and gives the major content
of each of these steps for every area. When the
overview is completed for each area their assembly
will provide the Business Plan.
They should be introduced by an executive summary
with following content:

Outline of the conclusions for each chapter of

the analysis; focusing on the strengths of the
company and how they will be capitalised on,
the weakness and the way they will be
overcome
Final conclusion
Action plan

PRODUCTS / SERVICES
Survey outline

PRODUCTS / SERVICES
basic information to be collected

Commercial leaflets
Products offered / services list, with
specifications
Costs of goods and services / sales prices
Qualitative assessment of the products / services
offered
Sales figures over 5 years
Future developments
Customer feed back

PRODUCTS / SERVICES
focus on special issues

Reputation of the company

Stage of the products / services in the life cycle
Positioning
Purchase motivation of the customers
Viability of the new products / services
Dynamism of the research & development
Intellectual property protection

PRODUCTS / SERVICES
success factors

Market recognition of the products / services

Price / quality ratio
Products / services meeting the present and
future market needs
Recognised existing demand for the products /
services offered
Sufficient turnover petential

PRODUCTS / SERVICES
risks and opportunities

Emergence of new products / services

Evolution of the products / services
Change in political and legal environment
Competitor's projects
Other possible factors influencing demand

PRODUCTS / SERVICES
key indicators

Future evolution of quantities sold

Future evolution of sales prices
Future evolution of cost of goods / services

PRODUCTS / SERVICES
overview

Brief description of the products / services of the

company, with qualitative and quantitative
appreciation
Importance of future potential with
demonstration through arguments
Evolution of turnover forecast by product /
service and corresponding profit margins

MARKET
Survey outline

MARKET
basic information to be collected

Available market studies

Comparative list of competitors
Commercial documentation of competitors
Branch related figures (turnover, number of
companies, employees, evolution...)
Turnover by customer
Talks with branch experts

MARKET
focus on special issues

Positioning of the company

Competitive situation of the market
Evolution of the market over the last 5 years and
trend over the next 5 years
Market segmentation
Seasonability of sales
Main issues having an effect on demand
Commercial actions of the company

MARKET
success factors

Confirmed market potential (growing market or

growing market share)
Medium and long range growth prospects
Reputation of the company in the market
Relationship of market price level with cost price
Potential of market penetration by the company

MARKET
risks and opportunities

Stengths and weaknesses of the competitors

Economic and political change of the target
market
Change of consumption habits

MARKET
key indicators

The company's market in figures

Market growth rate / market share growth rate
over 5 next years
Turnover with main customers
Turnover of main competitors

MARKET
overview

Short description of the positioning of the

company within its market
Market advantages of the company and potential
weaknesses
Market growth scenarios
Arguments supporting turnover forecasts

PRODUCTION AND
ADMINISTRATIVE FACILITIES
Survey outline

PRODUCTION AND
ADMINISTRATIVE FACILITIES
basic information to be collected

Organisation chart
Availabe MIS documents
Listing of resources / equipment with potential
output
Assessment reports, administrative analysis,
miscellaneous audits ...
Operating manuals
Costing basis
Talks with medium level management

PRODUCTION AND
ADMINISTRATIVE FACILITIES
focus on special issues

Efficiency of EDP
Simplicity and effectiveness of administrative
and accounting procedures
Age of the production plant
Evolution of the production potential over next 5
years
Technological adaptation
Production organisation
Quality control
Available means of communication

PRODUCTION AND
ADMINISTRATIVE FACILITIES
success factors

Performing production facilities

Satisfactory future capacity
Competitive costing
Reliable production planning
Ability to keep costs and deadlines
Sound and efficient administration
On time reporting system
Consistent procedures and organisation
Invoicing and accounting up-to-date

PRODUCTION AND
ADMINISTRATIVE FACILITIES
risks and opportunities

Dependency on EDP systems

Bottlenecks in production flow
Obsolescence of the production equipment
Change in technology or production process
Length of the lease agreement
Change in regard to the company's location

PRODUCTION AND
ADMINISTRATIVE FACILITIES
key indicators

Production costs
Production capacity
Production forecasts

PRODUCTION AND
ADMINISTRATIVE FACILITIES
overview

Description of production facilities: plant,

location, buildings and equipment
Technical capabilities
Production capacities
Brief critical assessment of the production
facilities
Comment about the administrative organisation
and its functioning

STAFF AND MANAGEMENT

Survey outline

STAFF AND MANAGEMENT

basic information to be collected

Staff number and listing

Payroll
Hierarchical organisation chart
Curriculum vitae of major executives
Board composition and minutes from the last 3
board meetings
Talks with some of the staff and directors

STAFF AND MANAGEMENT

focus on special issues

Seniority of the staff

Promotion path of the management
Decision mode prevailing in the company and
management style
Working atmosphere
Capabilities of the managers
Qualification level of the staff / remuneration
level

STAFF AND MANAGEMENT

success factors

Motivation of the staff

Technical ability of the management
Leadership from executives and directors
Competitive wages level

STAFF AND MANAGEMENT

risks and opportunities

Loyalty of staff and management; assessment of

the employment contracts of key people
Employees indispensable
Appearance / disappearance of qualified staff
Reliance on external consultants

STAFF AND MANAGEMENT

key indicators

Staff turnover
Absenteeism
Number of employees
Average wages / personal costs per employee
Bottom line and top salaries
Managers relationships with staff

STAFF AND MANAGEMENT

overview

Comments about total number, motivation,

remuneration and qualification of the staff
Brief assessment of the management and
summarised curriculum vitae of key executives

FINANCES
Survey outline

FINANCES
basic information to be collected

Financial of last 5 years

Forecast of balance sheets and budgets over next
5 years
Cash plan over 12 month
Debtors and creditors aged balances
Statement of inventory and work in process at
latest year end, plus present situation

FINANCES
focus on special issues

Goodwill and other immaterial values in balance

sheet
Intercompany accounts
Operating return
Extraordinary income
Financing mode and needs
Extraordinary expenses
Depreciation / amortisation
Cash situation

FINANCES
success factors

Balanced financing
Increase in return over medium term
Self-financing / depreciation capacity
State of the equity
Dividends generated

FINANCES
risks and opportunities

Sudden loss of value of some assets

Change in financing rates
Reliability of budget forecast
Continuity of the present financing, new
financing opportunities
Stock exchange fluctuations

FINANCES
key indicators

Turnover, expenses, gross and net result over last

5 years and forecast over next 5 years
Equity
Return on equity
Dividends expected and paid
Margin per product lines

FINANCES
overview

Summary of present financial situation of the

company
Comments on the forecasts (main assets and
debts, financing, results, return, equity and cash)
Key issues for financial success of the company

For any question please contact:

Laurent Vanat
PricewaterhouseCoopers SA
Av. Giuseppe-Motta 50
Case postale 2895
Tel. +41 (22) 748 53 82
Fax +41 (22) 748 55 87
E-Mail: laurent.vanat @ch.pwcglobal.com