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Preparing a business

plan
Making one that works !!!

Critical Aspects
What is the long term business vision?
Familiarise with the business plan template
Decide the planning team and define responsibilities
Firm up timelines with a project management approach
Review and Realign as necessary

A survey of 1000 small businesses found that companies that have business plans
made 50% more revenue and profit growth !!!

Environment Scan (As Is and To Be)


PESTEL Analysis

Political
Economical
Social
Technological
Environment
Legal

The Eastman Kodak Example.

Industry Scan
Porters Five Force Analysis

Size and its determinants


Scale
Markets and Competition
Value Chain
Key Success Factors (KSF)

Industry Analysis at a glance


Markets
Market Size
Market Growth
Product Choice
Substitutes

Structure
Competition
New Technology
Entry Barriers
Exit Barriers
Your
Company
Relationships
Suppliers
Customers
Distributors

Finances
Cost Trends
Profit Margins

Company Scan
Understand the History and Key Milestones (Stories)
SWOT Analysis for Key Functions:

Strengths
Weakness
Opportunities
Threats

Use the Environment,


Industry and Business
scan to define Objectives,
Strategy and Tactics

Objectives
Combination of Analysis and Aspirations
SMART (Specific, Measurable, Achievable, Realistic,
Timely)
Define it for Year 1, Year 2 and Year 3
Define business objectives and translate them into
financial objectives
Key Success Factors at functional level
Identify and define the Critical Assumptions

Revenue Planning
When you plan for revenues ,how do you build up the
numbers?
Which opportunities are you seeking to enhance
revenue ?
What changes are needed to the organisation to
achieve this revenue enhancement?
Are you creating Frankensteins monsters at any level
(suppliers, distributors and customers)

Cost Planning
Which are the critical cost elements?
Which are the cost elements that can have significant
variations?
Where are the hidden factories of inefficiencies?
Which components can benefit from zero based
budgeting?

Capex Planning
How do you plan your investments?
Do you look at payback period and ROI for your capital
expenditure?
How do you review the capex benefits?
Is there a owner for each capex investment?

People Planning
How people ready is your organisation for achieving the
business plan?
Do you plan for people at a function level?
How do you review your key person engagement?
How are you ensuring that critical functions have
adequate capability buffers?

Some Donts
Dont set pie in the sky goals for yourself
Dont sell your organisation short
Be careful what you aim for
Beware of too many words or too many numbers
Dont keep your goals and objectives a secret

Notes
J&J Tylenol case (1980s $ 100 Million)
Infamous Exxon Mobil / Volkswagon
Enron values (Respect, Integrity, Communication &
Excellence)
Vision (To change the world through technology Apple)