Transcript Document

Business Plan
By-Rahul Jain
Business Planning
"In preparing for battle I have always found that
plans are useless, but planning is
indispensable."
-Dwight Eisenhower
“Those who fail to plan, plan to fail.”
-George Hewell
BUSINESS PLAN BASICS
• The Business Plan - A SUPPORTED VISION
Mission/Vision Statement 1 paragraph
Elevator Speech 30 seconds
Executive 2-5 pages
Summary Presentation
PowerPoint
10-15 minutes
Team
Distribution
Sales and
Analysis
Competitive
Analysis
Market
Property
Intellectual
Technology
Projections
Financial
Full Business
Plan
20-30 pages
Detailed
Support/Foundatio
n
3
January 2010
Your Business Plan Will...
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Discuss a particular market opportunity.
Examine the markets that you will compete in, and
explain who your customers will be.
Describe
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the products or services that your company will provide.
Your competition, and how you will defend against it.
The operation that you will put in place in your company.
The management team that will implement the plan.
The size and profitability of your company.
SESSION 1: BUSINESS PLAN BASICS
Why Write a Business Plan?
Because I have to...
 Needed for financing
 Strategic partnering
 To
explain
business
customers/suppliers
 To attract key people
5
to
January 2010
SESSION 1: BUSINESS PLAN BASICS
Why Write a Business Plan?
– Because I Need to Understand My Business
The Business Plan is a result of a
PLANNING PROCESS
People don’t Plan to Fail; they Fail to
Plan
 Who are your customers?
 Why will the buy your service or product?
 What will they pay?
 How will you make and deliver the
service/product
 What
resources
(people,
money,
technology) will you need?
 Can you create value and make money?
6
January 2010
SESSION 1: BUSINESS PLAN BASICS

Who should write the Plan?
CEO alone?
The team?
A hired writer/consultant?

You need to OWN the Plan
7
January 2010
BUSINESS PLAN BASICS
WHY PLANS FAIL THE FIRST CUT
 Insufficient Market
 Non-Credible Technology
 Investment Too Large For The Promise
 Failure to Understand The Market
8
January 2010
BUSINESS PLAN BASICS
WHY PLANS FAIL THE FIRST CUT (cont.)
 Action Plan Not Credible
 Too Optimistic
 Naïve About The Hurdles
 Runs Off In All Directions
 Not Ambitious Enough
 Regulatory Barriers Insufficiently
Addressed
 No Promises At All
 Team Not Credible
9
January 2010
Components of the
Business Model
• Value Proposition
• Market Segment
• Competitive Strategy
• Value Chain Structure
• Revenue Generation and Margins
Value Proposition
•
A description of the customer
problem
•
The solution that addresses the
problem
•
The value of this solution from
the customer's perspective
Market Segment
•
The group to target
•
Recognizing that different
market segments have
different needs.
Value Chain Structure
•
The firm's position in the value
chain
•
Activities in the value chain
•
How the firm will capture part
of the value that it creates in
the chain.
Revenue Generation and Margins
•
How revenue is generated
(sales, leasing, subscription, support, etc.)
•
The cost structure
•
Target profit margins.
Different Models to
Evaluate
Direct
Mass Media
Retail
Telemarketing/ Phone
Sales
Channels, Distributors
and Partners
Trade Shows and
Conferences
OEM Channels
Internet - Web
BUSINESS PLAN BASICS
The
Plan
DOCUMENT
is
a
SELLING
 Don't lose sight of the vision
 The excitement must come through
 The Plan should project your image
BUT:
The Plan Must Be
Defensible
16
January 2010
The (very) Basics of a Business
Plan
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Executive Summary
Company Overview
Environmental Analysis
Strategy Formulation
Marketing and Sales Strategy
Operations
Financial Plan
Risk Factors and Contingency Plan
SESSION 1: BUSINESS PLAN BASICS
• What Should Be In A Business Plan?
Executive Summary
An Executive Summary is
 NOT an introduction
 NOT a preface
 NOT a random collection of highlights
An Executive Summary IS the
Business Plan in miniature
Why This?
Why Now?
Why This Team?
18
January 2010
Executive Summary
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The written version of the “60 second
pitch.”
Many people who read your plan, will only
read your Executive Summary...
...and then they may read your financials.
NOT an introduction, but a short version of
the whole plan.
SESSION
1:
BUSINESS
PLAN
BASICS
• What Should Be In A Business Plan?
-Executive Summary (continued)
The Executive Summary tells
 Who you are
 What your strategy/vision is
 What you are doing and/or propose to do
 What is the market
 How many $$$$ do you need and what will you
do with them
 What your SUSTAINABLE COMPETITIVE
ADVANTAGE is
 When the reader is finished he or she should be
able to tell someone what you are up to.
20
January 2010
EXECUTIVE SUMMARY: PEOPLE EXPRESS
The Eastern seaboard of the United States is ripe for the entry of a new,
superefficient, low-cost air carrier to provide quick, reliable inter-city air
transportation. Such an entity would bring to the Northeast the same benefits that
have accrued to other areas of the United States. Chief among these are:
 Frequent jet commuter service between major cities
 Prices competitive with private automobiles
 Fulfillment of the congressional goals in enacting the Airline Deregulation
Act of 1978 to have better service at lower fares.
The new company will be able to achieve these goals for the following reasons:
 Aggressive, innovative management that has been tested in the field and
been on the leading edge of innovation in air transportation marketing
and systems
 Equipment and facilities designed specifically for the low-cost production
of air transportation
 Manpower selected, trained, and motivated to be efficient and profit
oriented
 New systems to be applied to the entire business of air transportation to
minimize investment in manpower and machines
All of these, when applied to the new entity, will result in considerable economies
vis-à-vis existing air carriers.
 40 years of regulation have created an industry heavily unionized with
Company Overview

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Explanation of history, structure, and
organization of your company.
Strategic direction
 Mission statement.
 Goals and objectives.
 Values and vision.

People
 Relevant skills and expertise of management team.
 Directors.
 Relationships with experts in the field.
Environment

It will include both internal and external
factors
Market structure
Market trends
Competition
External Environment
SWOT Analysis
BUSINESS
PLAN
BASICS
The Opportunity
 What is the Market / Opportunity?
 How big is it now?
 What are the trends- how fast is it
growing or grow?
 Why Is This Time The Right Time For Your
Product/Service?
 Convergence of Opportunity and
Solution
25
January 2010
BUSINESS
PLAN
BASICS
Market Analysis
 Existing and planned products in
marketplace
 Market segments
 Market players/competition
 Competitive Advantages
 Estimated Market Shares
 Current Players
 You
 “Who Loses If You Win and What Will
Be Their Response?”
26
January 2010
• What Should Be In A Business Plan?
-The Body of the Plan
 Marketing Plan
 What is your Marketing Strategy?
 Pricing and Distribution
 Pricing and margin erosion
 Distribution
must
match
strategy/pricing
 Sales Tactics
 Who will be the first customer, second
customer etc.?
 How will you reach the customer?
 “Will the Dogs Eat the Dog Food?”
 Advertising and Promotion
27
January 2010
Marketing and Sales Strategy
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Products or services offered.
Follow-on products.
Intellectual property or other defendable
positions.
Market research.
Marketing plan.
 Brand strategy.
 Distribution strategy.
 Product strategy.
 Pricing strategy.
 Promotion.
Operations
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Practical details required to meet the plan.
Facilities.
Manufacturing or out-sourcing.
Personnel.
Varies widely depending on type of
business.
Legal Compliances
Financial Plan
Budgeting
Costing and Pricing
Income statement
Analysis and Interpretation
Assumptions and Rationale
Risk Factors
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This will contain the limitations and risk
factors affecting the business.
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Contingency plan has to be indicated
Format
Some tips:
 Don’t waste time on long introductions.
 Be passionate, convincing, interesting.
 Tell a story.
Assignment – 11th Januar y
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Dream Board
Research of your Business Idea & 5Qs
( Log Book)
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Dream
Board
Vision Collage _ Images
containing
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Company Overview, Values
Perfect Customers
Products & Services
Creative Cohorts