Business Plans

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Business Plans

  1. 1. Business Plans Sul Kassicieh Anderson School of Management
  2. 2. Introduction <ul><li>Focus your thinking </li></ul><ul><li>Establish realistic strategy </li></ul><ul><li>Financing and other support </li></ul><ul><li>Reaction by others </li></ul>
  3. 3. Definition <ul><li>Document that can convince the reader that the business can produce enough revenue to make a satisfactory profit and therefore attractive as an investment opportunity </li></ul>
  4. 4. Many reasons to build one <ul><li>BP should sell the writer/reader on the business: </li></ul><ul><ul><li>Writer: so that you can go out and do it, </li></ul></ul><ul><ul><li>Reader: to invest in it </li></ul></ul><ul><li>Confidence of knowing the issues </li></ul><ul><li>Improve chances of success </li></ul>
  5. 5. Many Purposes in real life <ul><li>Bank Financing </li></ul><ul><li>Strategic alliances </li></ul><ul><li>Large contracts </li></ul><ul><li>Key employees </li></ul><ul><li>Mergers and acquisitions </li></ul><ul><li>Mgt team motivation </li></ul><ul><li>Ours here : Investment by VC or Angels </li></ul>
  6. 6. Principles of BP <ul><li>No right way: plans can differ </li></ul><ul><li>Be creative but set a limit </li></ul><ul><li>Concise and focused </li></ul><ul><li>Captures energy and personality of business leader </li></ul><ul><li>Include negatives and issues </li></ul><ul><li>Spend some time on it </li></ul>
  7. 7. Sections of Business Plan <ul><li>Cover Page: contact name and info </li></ul><ul><li>Table of contents </li></ul><ul><li>Executive summary </li></ul><ul><li>The company: past, present and future </li></ul><ul><li>The market </li></ul><ul><li>The Product/service </li></ul>
  8. 8. Sections of Business Plan - continued <ul><li>Sales and Promotion </li></ul><ul><li>Financial projections </li></ul><ul><ul><li>Profit and loss </li></ul></ul><ul><ul><li>Balance sheet </li></ul></ul><ul><ul><li>Cash flow </li></ul></ul>
  9. 9. Other sections: technology based <ul><li>Management team: people who fund other people value management skills above “ideas” </li></ul><ul><li>Risk factors: shows that you know what could go wrong and plan to avert it </li></ul><ul><li>Marketing plan: if this is “innovative” how are you going to get people to use it </li></ul>
  10. 10. Packaging the Plan <ul><li>It is a ”living” document </li></ul><ul><li>No right/wrong way: the need of reader is essential </li></ul><ul><li>What are the challenges/ questions that can be raised by reader: answer these. </li></ul>
  11. 11. Packaging the Plan <ul><li>Include supporting materials </li></ul><ul><li>Don’t make unsupported statements </li></ul><ul><li>Designate an outside reviewer/ reader that can critique plan </li></ul>
  12. 12. Sites with sample plans <ul><li>www.businessplans.org/businessplans.html </li></ul><ul><li>www.bplans.com/sp/businessplans.cfm </li></ul><ul><li>www. business planarchive.org/ </li></ul>

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