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  • To define what the business plan is, who prepares it, who reads it, and how it is evaluated.

  • To understand the scope and value of business plan to investors, lenders, employees, suppliers and customers.

  • To appreciate examples and a step-by-step explanation of the business plan.

  • To develop helpful questions for the entrepreneurs at each stage of the planning process.

  • To understand how to monitor the business plan

A document that explains a business opportunity, identifies the market to be served, and provides details about how the entrepreneurial organization plans to pursue it.

Business plan describes the unique qualifications that the management team brings to the effort, explains the resources required for success, and provides a forecast of results over a reasonable time horizon.

Business plans are inherently strategic.

  • You start here, today, with certain resources and abilities.

  • You want to get to a there, a point in the future (usually three to five years out) at which time your business will have a different set of resources and abilities as well as greater profitability and increased assets.

  • Your plan shows how you will get from here to there.

A “Business Plan” is a “Selling Document” that conveys the excitement and promise of your business to any potential backers and stakeholders.

The business plan sometimes referred as game plan or the road map answer the questions:

  • Where am I now?

  • Where am I going? &

  • How will I get there?

A solid business plan is essential for any business that seeks outside funding from banks, “angels,” venture capitalists— even relatives.

The act of writing the plan will force you and your team to think through all key elements of your business.

Trusted and experienced outsiders who review your initial plan will help you identify weaknesses, missed opportunities, unsupportable assumptions, and overly optimistic projections.

The plan’s financial projections can be used as a budget.

  • Actual results that fall short of planned results will prompt you to investigate and take corrective action

A solid plan can be a blueprint for operating your business over the first one or two years, increasing the likelihood of success.

  • The plan will tell you how much you can afford for personnel,advertising, and other expenses.
  • It will specify target customers and success factors

  • It helps to focus ideas and serves as a feasibility study of the business's chances for success and growth.

  • The finished report serves as an operational tool to define the company's present status and future possibilities.

  • It can help you manage the business and prepare you for success.

  • It defines your purpose, your competition, your management and personnel.

  • The process of constructing a business plan can be a strong reality check.

The business plan should be prepared by the entrepreneur, however, he or she may consult with many other sources for its preparation:

  • It doesn't matter if a company is using a business plan to seek financial resources, evaluate future growth, define a mission or provide guidance for running the business.

  • A business plan should be a professionally presented compilation that reflects the business in its entirety.
  • Lawyers, accountants, marketing consultants, and engineers are useful in the preparation of the plan.

  • The internet also provides a wealth of information as well as actual sample templates or outlines for business planning.

  • To help determine whether to hire a consultant or to make use of other resources, the entrepreneur can make an objective assessment of his or her own skills.

Contents of a Business Plan

  • Introduction Page:
  • This is title or cover page that provides a brief summary of business plan’s contents.

  • Executive Summary:
  • This sets out the business plan is prepared often the total plan is written. About two to three pages in length, the executive summary should stimulate the interest of the pot.

  • Environmental and Industry Analysis:
  • Assessment of external uncontrollable variables that may impact the business Industry Analysis- Reviews industry trends and competitive strategies.

  • Description of Venture:
  • This provides complete overview of the product(s), service(s),and operations of a new venture.
  • Production Plan:
  • This details how the product (s) will be manufactured.

  • Operations Plan:
  • This section goes beyond the manufacturing process(when the new venture involves manufacturing & describes the flow of goods and services from productions to customers it might include inventory, or storage of manufactured products, shipping, inventory central procedures & customer support services.

  • Marketing Plan:
  • It describes market conditions and strategy related to how the product(s) and service(s) will be distributed, priced & promoted.

  • Organisational Plan:
  • This describes form of ownership and lines of authority and responsibility of members of new venture.

  • Financial Plan:
  • It is all about projections of key financial data that determine economic feasibility and necessary financial investment commitment.

  • Assessment of Risk:
  • This identifies potential hazards and alternate strategies to meet business plan goals and objectives.

The business plan may be read by employees, investors, bankers, venture capitalists, suppliers, customers, advisors, and consultants. They are expected to read the plan and can often affect its actual contents and focus.

  • Since each of these groups reads the plan for different purposes, the entrepreneurs must be prepared to address all their issues and concerns.

The business plan is important to these people because:

  • It helps determine the viability of the venture in a designated market.

  • It provides guidance to the entrepreneur in organising his or her planning activities.

  • It serves as an important tool in helping to obtain financing.

The planning process forces the entrepreneurs to bring objectively to the idea and to reflect on such questions as:

  • Does the Idea Make Sense ?
  • Will it work?
  • Who is My Customer?
  • Does it Satisfy Customer Needs?
  • What kind of protection can I get against imitation by competitor’s.
  • Can I Manage such a Business ?
  • Whom will I Compete with?

This self-evaluation is similar to role playing; requiring the entrepreneur to think through various scenarios and consider obstacles that might prevent the venture from succeeding. The process allows the entrepreneurs to plan ways to avoid such obstacles.

  • If convinced, the ventures may be terminated while still on paper.

Lenders:

  • Interested in the venture’s ability to pay back the debt.

  • Focus on the four Cs of credit :
  • Character:
  • The entrepreneur's credit history or character.
  • Cash flow:
  • Their ability to meet debt and interest payments (cash flow.)
  • Collateral:
  • The collateral or tangible assets being secured.
  • Equity Contribution:
  • Equity contribution or the amount of personal equity that has been invested by the entrepreneur.

Lenders:

  • Look especially for existing assets, evidence of financial stability, likelihood of ability to repay the loan.
  • And after that the normal content of a business plan, including team, market, product, strategy, tactics, milestones, projected sales, spending, and cash flow.

  • Potential investors look for likelihood of an eventual exit back to liquidity with an attractive return.
  • They want to see a credible team; a strong potential market; good product-market fit; differentiators such as secret sauce, technology, or market position; potential to scale up to high growth; traction; validation; milestones met.
  • Sales is a great indicator, but in some cases other traction such as users and subscribers.

1)Your pitch and presentation need to build on the theme.

2) Determine How Much Funding to Request.

3) Prepare Your Message.

  • E-mail message and elevator pitch.
  • Every entrepreneur should have a short, concise speech ready whether they step onto an elevator or prepare to travel on an airplane.

  • Summary memo.
  • This is a lengthier treatment of your elevator pitch.
  • It consists of a 2-5 page memo summarizing the need or want you fill as a business offering, your target market, differentiation, growth prospects, management team, and your financing plan.

  • Pitch presentation.
  • This is your more formal pitch presentation that you make to investors.
  • Cover the same elements included in your summary memo and in the executive summary of your business plan.
  • Plan on 20 minutes maximum with no more than 10 slides, and use pictures and diagrams, not bullet points.

4) Research Potential Partners:

  • Potential investors can range from family members and friends to venture capitalists or angel investors.
  • "You should choose an investor as carefully as you choose a spouse.
  • Who you target is very important.
  • It's not always good to go it alone.
  • It's good to find intermediaries:-
  • Join the chamber of commerce, talk to business professors, and search the Web.
  • Seek compatibility.

Pointers to a perfect pitch:

  • Be specific and concise:
  • Know what you want to say.
  • Know your business plan.
  • Pick out what matters most.
  • Sell yourself:
  • This is the "why me" section.
  • Talk about your skills, background, vision and why you can make it work.
  • Sell your offering:
  • This is the "heart" of the pitch.
  • What need does your business fill?
  • Why is anyone going to buy your product or service?
  • Close the deal:
  • This is where you put your salesman's cap on.
  • Make sure to make a strong finish.
  • Nail your delivery:
  • Practice makes perfect.
  • So practice your pitch and presentation in front of family, friends, business associates, etc. and get feedback on how to improve it.

Your objectives should be crystal clear and specifically spelled out, since you’ll use them as a building block for the rest of the implementation plan.

  • Secure office space, set up the company/infrastructure and start trading within three months.

  • Secure your first deal within two months of trading.

  • Make one business deal every month from there on for the first year.

For example let’s assume your startup is a small consulting firm. Your objective should be tough but reachable, and could read something like this:

  • Secure office space and be open for business in three months.

  • Sign three clients within first three months of operations.

  • Sign 10 clients within the first year.

Tasks:

This part details what must be accomplished to achieve your objectives.

  • Include a task manager for each step, so that roles are clearly defined and there is accountability.

  • As you enumerate tasks and assignments, these descriptions should be plainly and generally stated; don’t get into a step-by-step, micromanaged explanation of how the tasks will be carried out.

  • Emphasize the expected results associated with these tasks.
  • Secure office space – real estate agent
  • Obtain licenses and permits – you
  • Set up office phones and computers – office manager
  • Begin recruiting clients – sales manager
  • Create marketing collateral – marketing manager
  • Solicit referrals from clients – relationship manager

Time allocation:

Each task should be paired with an appropriate time frame for completion.

  • You should be aggressive but reasonable with your time allocation in order to ensure not just completion but competent work.

For assistance in framing this timescale, use a program such as Microsoft Project, or just create your own Gantt chart – a helpful tool that shows how long it will take to complete different tasks and in what order the tasks should be finished.

Progress:

You or a member of your management team needs to be in charge of monitoring each task’s progress and the completion percentage of each objective.

  • When delays occur, try to get to the root of the problem.
  • Did the person responsible drop the ball?
  • Did he or she have too many responsibilities to handle?
  • Did a third party, such as a supplier or the bank, fail to hold up its end of a deal?
  • Adjust your Gantt chart appropriately to account for the delay, and make a note of the previous deadline and the reason it was missed.
  • The early days of a startup are critically important; it’s a time when good management patterns are set and also probably a lean era when revenue has yet to start rolling in.

  • The more efficiently you start implementing your business plan, the more likely it is that you will survive this early period.

Keep a tab on your finances:

  • Keep reviewing your finances.
  • Are you hitting your targets?
  • If not, why not? Implement changes to tackle this.

Join a trade association or networking group:

  • Business plans are always dynamic.
  • Make sure you join a networking group so you can keep up to date with on the ground market knowledge, connections, and legal and financial updates.
  • You may need to react and change accordingly.
  • Don’t get totally blinkered into your business plan, you always have to see what is going on around you.

Regularly review your business plan

  • Review your business plan on a regular basis.
  • Compare budgeted numbers to actual figures of doing business.
  • Determine whether you can keep operating as you are or whether you need to make changes, such as reducing costs, raising prices or increasing marketing.

  • Inventory Control
  • Production Control
  • Quality Control
  • Sales Control
  • Disbursement Website Control

Why Some Business Plan Fail?

  • Goals set by the entrepreneur are unreasonable.
  • Objectives are not measurable.
  • No total commitment to business.
  • No experience in planned business.
  • No sense of potential threats to or weaknesses of the business.
  • No customer need was established for the proposed product or service.

GOAL!

Measuring Plan Progress

Measuring Plan Progress

Presentation of the Business Plan

Using and Implementing the Business plan

Objectives:

How Do Potential Lenders and Investors Evaluate the Plan

The Business Plan:

The business plan must reflect:

  • Strengths of the management & personnel.
  • Product/service.
  • Available resources.

Scope and Value of the Business Plan Who Reads the Plan

Who Should Write the Plan?

Need for a Business Plan

Creating and Starting the Venture

It forces the person preparing the plan to look at the business in an objective and critical manner.

Business Plan

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