Transcript Business planning

What is business planning?
What is the objective of a business plan?
What are the main steps of a business
plan?
Business Planning (2)
Business planning is to plan a business starting from the
phase of thought till the phase of business generation.
A business plan is a written explanation of the companies
business model.
A business plan is a summary which shows
• how the enterprise will be organized and
• which activities will be implemented for the
venture’s success.
Business Planning (3)
Business plans are
• used internally for
management and planning and
• are also used to convince
outsiders such as banks or
venture capitalists to invest
money into a venture.
Business Planning (4)
Many people think of business plans
only for starting a new business.
But they are also vital for running a
business.
Businesses need plans to optimize
growth and development according
to priorities.
Business Planning (5)
Opportunity Analysis
Marketing Plan
Organization Plan
Financial Plan
Business Planning (6)
Business Planning (7)
o
Firm: Firm A
o
o
o
Products: Pumps, engines
Customers: Industrial companies
Geographical areas: Turkey
MGR
P
E
RMS
o
Growth for P (Pump)
o
Divest for E (Engine)
Backward
pump
Fan
Business Planning (10)
cast
iron
Forward
refrigerator
washing
machine
Horizontal
Comp.
Firm
Suppliers
Econ. Scale
Skills
X
X
Refrigerator
Washing
Machine
New Business Area: Refrigerator
Business Planning (11)
Econ. Scale
Skill
Decision
X
4.1. Segmentation
For families
Business Planning (12)
For singles
4.2. Targeting
Refrigerator
for families
Refrigerator
for singles
Business Planning (13)
X
4.3. Positioning
Ideal
Firm A
Standard
Luxury
Competitor
Business Planning (14)
Message: Affordable
luxury products
Media: TV / 10 sec /
50 days / year
Sales promotion:
Small scale
refrigerator as a
toy on sale
Business Planning (15)
Price of refrigerator:
Volume * 1 + Number of Doors *
200
Product varieties
Product varieties: D1/V500,
D1/V1000, D2/V500, D2/V1000
Price of (D1/1000) = 1000* 1 + 1 *
200 = 1200
Business Planning (16)
Criteria
Varieties
No Door
1
2
Volume
500
1000
Sales
X
X
X
X
X
X
Time (period)
20
T(21) = 500 + 10 * Period
T(21) = 500 + 10 * 21 = 710
Y (21)= T(21) * S = 710 * 1.1 = 781
index for S=1.1
Sales of D1/V1000/Total Sales=0,50
Sales for D1/V1000= Y(21) * 0.50
Business Planning (17)
8.1. Production Process
Raw Material(Part A)
P1
Refrigerator
Business Planning (18)
P3
Part B
P2
8.2. Production Method
Q
PV
D1/V1000
D2/V1000
Production Type:
Product type for D1/V1000 and D2/V1000
Process type for others
Business Planning (19)
8.3. Production flow
P1
P3
D1/V1000
P3
D2/V1000
P2
P1
P2
D1/V500
P1
P2
Business Planning (20)
P3
D2/V500
Machine
P1
(for
D1/V1000)
Capacity
(Time/year)
Demand
781*0.50*100
Required
4
10000
2
P1 …
Machine Required Price
P1
6
Business Planning (21)
1000
Life time
(year)
Total
10
6000
How to
finance Interest
loan
10.1. Variable cost
• Unit Variable Cost: Raw Material Cost + Unit
Energy Cost
: Unit Raw Mat. * Unit Price of RM + …
= 1 (Part A) * 100 + 1 (Part B) * 100 + …
= 200 + 50 = 250
Total Variable Cost at Year 1 = Total Production*
UVC
= 781 * 250
Business Planning (22)
10.2. Fixed cost
Item
Depreciation
for Manuf.
TV
Advertising
Year1
6000 / 10 = 600
50 * 500 = 25000
Promotion
Business Planning (23)
Year2
Year3
Gross Profit = Income –
Manufacturing Cost
= [1200 * (781 * 0.50) + …] – (6000
+ 781 * 250)
= 100 000
Business Planning (24)
Current Asset
- Bank
Loan
50 000
Fixed Asset
- Machines
10 000
Equity
100 000
150 000
Business Planning (25)
- Longterm
-
50 000
150 000
Ratios for Year 1
Profitability for
Gross Profit: 100
000 / 150 000
Evaluation ratios:
Decision: Enter
Refrigerator
business area
Don’t enter
refrigerator
business area
Business Planning (26)