Professional Documents
Culture Documents
Contents
Introduction Importance/Purpose Functions Need How to get the data? Analytical Techniques Major Constituents Conclusion
Definition
A Business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals. The business plan describes the past and present status of a business, but its main purpose is to present the future of an enterprise.
Did Bill Gates do a business plan? Who should do a Business plan? When should I do a business Plan? And finally, what exactly is a business plan ?
What?
Why?
1,000,001 questions Infinite number of possibilities Distractions galore 6-9 pages for the narrative, plus financials/ appendices
How Long?
Provides clarity of thoughts and purpose Introduces Business Model Introduces the company and the team Attempts to persuade investors Highlights risks and challenegs Serves as an entry point for further discussion
Importance of B-Plan
Supports decision making with various tools Must have document because it is good to have Conducted prior to commencement of business Covers all aspects related to business Covers Peers, Market, Financial, Strategy etc Risks & Challenges well defined Internally and externally focused.
is my business Idea? What is the pain point it addresses? Who is my customer? Who is my team? How much money do I need and how will I raise it? How much money will I make in future years?
General Rules
Bullet points Balance creativity while still getting your point across Use short (1-3 sentence) paragraphs Be careful with using industry jargon Consider using the third-person
Developing a Mission
Getting Ready
Setting Goals
Assessing a Situation
An assessment of how your customers, partners, competitors and suppliers view on your business. Should be a honest and self critical exercise trying to answer important questions.
Developing a Mission
Developing a Mission can change or reconfirm your direction of the business. Your vision says how you see yourself in the far future. It expresses what you want your company to become. Your mission defines what you want to achieve. It states the benefits your business will bring to clients, employees, shareholders and the community as a whole. Your philosophy expresses the values and beliefs of your organization's culture.
Getting Ready
Some important measures you need to do when getting ready are:Appointing a Coordinator Hiring a Facilitator Defining Tasks Identifying team members
Gathering Information
Setting Goals
Setting Goals is a pre-requisite for preparation of the business plan. Goals have to be adjusted in the iterative planning process. Goals should be time-bound, realistic and measurable.
Working out the business plan basically involves synthesizing and harmonizing the marketing, sales, development, manufacturing, operations and financing targets in such a way as to enable the enterprise to meet its overall objectives. This matching work is usually conducted in an iterative process until full consistency of all elements of the business is achieved.
Action plans, monitoring systems and constant feedback should be integrated to ensure successful implementation of the plan and achievement of its objectives. Participation in this process can have a profound effect on the way your team members view their role in the enterprise, and can have an immediate impact on their performance. The key to maximizing the benefits of dynamic planning lies in implementation, action and keeping the plan up to date.
Not Creating a plan Incomplete Market Research Not being objective Making Unrealistic Assumptions Providing useless information
Page Numbers
Margins
Fonts
Size of documents
Sample
Analytical Techniques
PEST Analysis SWOT Analysis Competitor Analysis Marketing Audit Political, Environmental, Social and Technological Analysis Strengths - Weakness Opportunities - Threats
Market Share
Idea to Implementation Variance
Business Description Market Analysis Competitor Assessment Marketing Plan Operating Plan Financial Plan
Business Description
An introduction to your business, the section this section should provide an overview of the business and its objectives. Readers of the business plan will want to know why this business should exist.
Executive Summary
Write this document after the content section of Business Plan is completed Although, its written last, its presented first Should not exceed one page
Business Description - 1
Business Description - 2
Business Overview
Business Description - 3
Simple Explanation of Products and Services Product Mix, if more than one product Quantitative Goals Timelines to achieve those goals Objectives for Functional Areas like Marketing, Operations etc
SMART Objectives
Functional Objectives
Market Analysis
This section is a place to discuss the markets and ventures approach towards it. In this, the ventures plan to gain an advantage in market place should clearly be communicated using graphs, charts and ground reality data
Star Concerns
Supplier Power (Suppliers Bargaining Power) New Competitor Substitute Products Buyer Power Industry Rivalry Government Regulations related to Products/Services
Are they local, regional, national or international Age group of customers Behavioral characteristics of Customer Cultural & Social Considerations Do their needs differ by industry? Do different region customers have different need? Key Decision Taking Buying/Selling/Vendor Policies of the company
Industry
Competitor Assessment
All businesses have competitors in some form. Some sell similar products, while others sell products that functions same. Established businesses can not take ventures entry into market lightly. Defining competitors, profiling them and critical analysis of their strengths and weakness is crucial
Key Points
Competition
Describe Direct & Indirect Competition Key Competitors, Market Share, Goals, Strategies List all key entry barriers State how it will be difficult for competitors to copy Competitors and Customers reaction Companys Competitive Advantage
Sample: Competition (1 of 2)
The main competitors in the retail coffee segment are Cafe Paradisio, Full City, Coffee Corner and Allann Bros. These businesses are located in or near the downtown area, and target a similar segment to JavaNet's (i.e. educated, upwardly-mobile students and business people). Competition from online service providers comes from locally-owned businesses as well as national firms. There are approximately eight, local, online service providers in Eugene. This number is expected to grow with the increasing demand for Internet access. Larger, online service providers, such as AOL and CompuServe are also a competitive threat to JavaNet. Due to the nature of the Internet, there are no geographical boundaries restricting competition.
Sample: Competition (2 of 2)
Due to intense competition, cafe owners must look for ways to differentiate their place of business from others in order to achieve and maintain a competitive advantage. The founder of JavaNet realizes the need for differentiation and strongly believes that combining a cafe with complete Internet service is the key to success. The fact that no cyber-cafes are established in Eugene, presents JavaNet with a chance to enter the window of opportunity and enter into a profitable niche in the market. JavaNet will be the first Internet cafe in Eugene. JavaNet will differentiate itself from the strictly-coffee cafes in Eugene by providing its customers with Internet and computing services.
Competitive Grid
Competitor Offerings Bobo Salon and Styling Mens/women's cut/styles/color perms Starts at $38 100% markup High traffic, highly visible 20+years, up-to-date trends Set hours, little schedule flexibility Low 11 active chairs Over 4000 Johnnys Hair Mens cuts only BEST CUTS Mens/ womens cut/ style/ color/ perms Starts at $30 75% markup High traffic, not visible 13+ years, up-to-date trends Custom hours to suit clients needs Sole stylist 1 active chair Over 300
Service Prices Retail Prices Location Expertise Service Turnover Capacity Client Base
Starts at $50 100% markup Moderate traffic, highly visible 15+ years, young hairstylists Manager never there High 8 active chairs ?
Marketing Plan
Simple Explanation of Products and Services Product Mix, if more than one product Target Application by Customers, Users Key component of Raw Material and its viability Testing Plans and Budget Product Up gradation, Expansion Product Line Product Attributes, Product Life Cycle,
Pricing
Marketing Plan
Market research Segmentation and targeting Unique selling points Chosen pricing strategy Promotional plans Distribution strategy (including online) Customer service strategy and Benefits to customers and his buying pattern and motives Measuring Demand, Customer Requirement etc Forecasting Trends and Changes
Lay out of basic marketing and sales strategy Details about Strategic Partnership Distribution Strategy and Chain Pricing Strategy Warranties, Sales Support and their impact Quantify the marketing budget
Promotion
Designing promotional campaign Defining range of promotional tools Choosing the right kind of promotion media Combination of Advertising, Personal Selling Efforts and General Public Relations Focus of Target Segment Well within Defined Budget Timelines of Activities
Selling responsibility, channels and methods Targets Aids Training Arguments Client decisions Selling Process time and Payments Incentives Order Processing and order on hands Handling Complaints
Operation Plan
Operation Plan
Physical location The production process, equipments and Facilities Scale & location of operations Capacity - potential and effective Engineering and design support Materials required, Inventory levels and stock control plans Purchasing arrangements and Sources of supply of key resources Quality control plans
Technology
Technical information of all product services Describe additional or ongoing research and development needs Keep the description in lay terms so that non tech savvy persons can also understand Do Not reveal THE SECRET SAUCE
Location of Business
Local Market Availability of workers & Living Conditions Supporting Services Material Supply & Transportation Utilities
Future Development Competition Image Economic Growth Local Authorities Site Accessibility Cost of Premises
Premises of Business
Licenses Layout Representation Expandability Safety regulations Environmental Issues Buy or rent
Shareholders, Board of directors, Executive/operations management, Middle management, External support services
Intellectual Property
Briefly Describe your patents, copyrights License agreement, terms and conditions etc Importance increases when the base is science and technology This must occur prior to start up the business
Approvals and licensing requirements Social compliance Issues Key Government Regulations Environmental Problems Waste Disposals, Air Pollution, Handling and storing of hazardous materials, noise abatement, treatment of waste. Political Stability
Financial Plan
Investment appraisal - payback and discounted cash flow Break even analysis Evaluation criteria for performance review Ratio analysis: net profit margin, Gross profit margin, return on capital employed, liquidity and solvency analysis Income Projections Cost Benefit Analysis
A definition of additional funds required for developing the business, i.e. how much money would be needed, when it will needed and when would be paid back.
Personnel Lease/ Rent/ Mortgage Loan Payments Legal Fees Accounting Supplies Salaries/ Wages Dues/ Subscriptions/ Fees Repairs/ Maintenance
Insurance Advertising/ Promotions Depreciation Payroll Expenses Internet Payroll Taxes Travel/ Entertainment Miscellaneous 3-6 Months of Operating Capital
Year One 4
10
11
12 Total
Sales forecast Forecast profit and loss account (income statement) Cash flow forecast (cash budget) Forecast balance sheet for each of the first two years (The assumptions behind the forecast should also be included)
Risks
Summarize risks of proposed project(SWOT Analysis, Five Forces PEST Analysis, Investment Economic Forecasts, Change in Technical Obsolesces Summarize how risks will be addressed
Addressing risk
Rewards
Possible Risks
Types of Risks
General Economic Environment
Interest Rates, Fluctuations, Recession, Inflation, Raw Material Prices
Political/Regulatory Issues
Licenses and Approvals, Tariffs and Quotas, Government Grants, Increase in taxes, New Regulatory Requirements, Exchange Rate Controls
Technological
Underlying Product technology, Production technology
Law Suits
Cont
Staffing
Management, Workers, Financial irregularity,
Client Related
Loss of clients and client payments.
Subcontracting Market
Sales variation, Stronger Competition
Resource Requirements
Details of capital required and uses External finance required How it is proposed to raise the finance Sources of finance: Short, medium and long term; Debt v equity
External requirements
Key Issues
Near Term Long Term
Isolate key decisions and issues that need immediate or near-term resolution Isolate issues needing long-term resolution State consequences of decision postponement State Specific
Seeking Funds
Identify SWOT
Summary Slide
planning
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