Opportunity, strategy & the evaluation of the business plan?

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Opportunity, Strategy & the Evaluation of the Business Plan? - The nature of opportunity, How entreprneeurs really work, can and do entrepreneurs use a business plan?, Business plan or business model?, Forecasting, formats, and evaluation

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Opportunity, strategy & the evaluation of the business plan?

  1. 1. Opportunity, Strategy & the Evaluation of the Business Plan?<br />Mohd. Murray Hunter<br />
  2. 2. Discussion Today<br />Forecasting <br />The nature of opportunity<br />Formats<br />How entrepreneurs really work<br />Evaluation<br />Can and do entrepreneurs use a business plan?<br />Business Plan or Business Model?<br />
  3. 3. Small Business Verses Entrepreneurship<br />
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  5. 5.
  6. 6. ©Hunter (2011)<br />
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  8. 8.
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  12. 12. The forms of opportunity<br />©Hunter (2011)<br />
  13. 13. ©Hunter (2011)<br />
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  25. 25. Four potential firm opportunity seeking typologies <br />
  26. 26. ©Hunter (2011)<br />
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  28. 28.
  29. 29. Two ways to scan for opportunities<br />Matching product to some marketspace<br />Matching marketspace to some product<br />
  30. 30.
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  32. 32. ©Hunter (2011)<br />
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  36. 36.
  37. 37. How Entrepreneurs Really Work<br />
  38. 38. Creativity<br />The Summarised <br />Entrepreneurial<br />Process<br />Idea<br />Turn into Opportunity<br />Innovation<br />Final Commitment<br />NPD<br />Start-Up<br />Strategy<br />Growth<br />Sales<br />Sustainability<br />Resource Gathering<br />
  39. 39. ©Hunter (2011)<br />
  40. 40.
  41. 41.
  42. 42. Can and do entrepreneurs use a business plan?<br />
  43. 43. The Secret<br />
  44. 44.
  45. 45.
  46. 46.
  47. 47.
  48. 48.
  49. 49.
  50. 50.
  51. 51. Business Plan<br />Or<br />Business Model?<br />
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  58. 58.
  59. 59. Perspectives<br />
  60. 60. Where does the information come from?<br />
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  73. 73.
  74. 74. Format<br />
  75. 75.
  76. 76.
  77. 77. Forecasting<br />
  78. 78.
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  80. 80.
  81. 81.
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  85. 85.
  86. 86.
  87. 87.
  88. 88.
  89. 89. Checklists<br />
  90. 90. Questions you should ask about financial viability?<br />
  91. 91.
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  109. 109. A New Venture Checklist<br />Basic Feasibility of the venture<br /><ul><li> Can the product or service work?
  110. 110. Is it legal?</li></ul>Competitive Advantages of the New Venture<br /><ul><li> What specific competitive advantages will the product/service offer?
  111. 111. What are the competitive advantages of firms already in business?
  112. 112. How long will it take for firms to respond?
  113. 113. Will the initial competitive advantage be maintained?</li></ul>Buyer Decisions in the Venture<br /><ul><li> Who Are the customers likely to be?
  114. 114. How much will each customer buy and how many customers are there?
  115. 115. Where are these customers located and how will they be serviced?</li></ul>Marketing of the Goods and Services<br /><ul><li> How much will be spent of advertising and promotion?
  116. 116. What share of the market will the company capture?
  117. 117. How long will it take to capture?
  118. 118. Who will perform the selling functions?
  119. 119. How will prices be set?
  120. 120. How will they compare with competitors prices?
  121. 121. How important is location and how will it be determined?
  122. 122. What distribution channels will be used – wholesale, retail, agents, direct?
  123. 123. What are the sales targets? By when should they be met?
  124. 124. Can any orders be obtained before starting the business? How many?</li></ul>Production of the Goods and Services<br /><ul><li> Will the company make or buy what it sells?
  125. 125. Or will it use a combination of these two strategies?
  126. 126. Are sources of suppliers available at reasonable prices?
  127. 127. How long will delivery take?
  128. 128. Have adequate lease arrangements for premises been made?
  129. 129. Will the needed equipment be available on time?
  130. 130. Do any special problems with plant setup exist?
  131. 131. How will quality be controlled?
  132. 132. How will returns and servicing be handled?
  133. 133. How will pilferage, waste, spoilage, and scrap be controlled?</li></ul>Staffing Decisions in the Venture<br /><ul><li> How will competence in each area of the business be ensured?
  134. 134. Who will have to be hired? By when? How will they be found and recruited?
  135. 135. Will a banker, accountant, lawyer or other advisors be needed?
  136. 136. How will replacements be obtained if key people leave?
  137. 137. Will special benefit schemes need to be arranged?</li></ul>Control of the Venture<br /><ul><li> What records will be needed? When?
  138. 138. Will any special controls be required? What are they?
  139. 139. Who will be responsible for them?</li></ul>Financing the Venture<br /><ul><li> How much will be needed for the development of the product or service?
  140. 140. How much will be needed for setting up operations?
  141. 141. How much will be needed for working capital?
  142. 142. Where will the money come from?
  143. 143. Which assumptions in the financial forecasts are most critical and uncertain?
  144. 144. What will be the return on equity, sales?
  145. 145. How does it compare with the rest of the industry?
  146. 146. When and how will investors get their money back?
  147. 147. What will be the need from the bank?
  148. 148. What will be the bank’s response?</li></li></ul><li>
  149. 149. Pitfalls to look for in Selecting New Ideas and Opportunities<br /><ul><li> Lack of Objective Evaluation
  150. 150. No real insight into the market
  151. 151. Inadequate understanding of technical requirements
  152. 152. Poor financial understanding
  153. 153. Lack of Venture uniqueness
  154. 154. Ignorance of legal issues</li></li></ul><li>Why New Ventures Fail (look for anything fundamentally wrong)<br /><ul><li> Insufficient Capital
  155. 155. No business plan
  156. 156. No managerial focus
  157. 157. Inadequate records
  158. 158. Lack of profit focus
  159. 159. Cash flow
  160. 160. Inadequate systems
  161. 161. Failure to plan for taxation
  162. 162. Inadequate resource management
  163. 163. Break even point</li></li></ul><li>Business Plan Assessment<br />There are 10 components of a business plan<br />Is your business plan thorough in all areas<br />5 Outstanding (thorough and complete in all areas)<br />4 Very good (most areas covered but could use improvement in detail)<br />3 Good (some areas covered in detail but other areas missing)<br />2 Fair (a few areas covered but very limited detail)<br />1 Poor (no written plans)<br />
  164. 164. Executive Summary<br />5 Outstanding (thorough and complete in all areas)<br />4 Very good (most areas covered but could use improvement in detail)<br />3 Good (some areas covered in detail but other areas missing)<br />2 Fair (a few areas covered but very limited detail)<br />1 Poor (no written plans)<br />
  165. 165. Description of the Business<br />What type of business will you have?<br />What products or services will you sell?<br />Why does it promise to be successful?<br />What is the growth potential?<br />How is it unique?<br />5 Outstanding (thorough and complete in all areas)<br />4 Very good (most areas covered but could use improvement in detail)<br />3 Good (some areas covered in detail but other areas missing)<br />2 Fair (a few areas covered but very limited detail)<br />1 Poor (no written plans)<br />
  166. 166. Marketing<br />Who will be your customers?<br />How big is the market?<br />Who will be your competitors?<br />How are their businesses prospering?<br />5 Outstanding (thorough and complete in all areas)<br />4 Very good (most areas covered but could use improvement in detail)<br />3 Good (some areas covered in detail but other areas missing)<br />2 Fair (a few areas covered but very limited detail)<br />1 Poor (no written plans)<br />How will you promote sales?<br />What market share do you want?<br />Do you have a pricing strategy?<br />What A&P strategy will you use?<br />
  167. 167. Operations<br />Have you identified a specific location?<br />Have you identified the advantages <br />of this Location?<br />Are there any zoning or tax considerations?<br />Will you have access to transportation?<br />5 Outstanding (thorough and complete in all areas)<br />4 Very good (most areas covered but could use improvement in detail)<br />3 Good (some areas covered in detail but other areas missing)<br />2 Fair (a few areas covered but very limited detail)<br />1 Poor (no written plans)<br />Will your suppliers be <br />conveniently located?<br />
  168. 168. Management <br />Who will manage the business?<br />What qualifications do they have?<br />How many employees will you have?<br />What will they do?<br />5 Outstanding (thorough and complete in all areas)<br />4 Very good (most areas covered but could use improvement in detail)<br />3 Good (some areas covered in detail but other areas missing)<br />2 Fair (a few areas covered but very limited detail)<br />1 Poor (no written plans)<br />How much will you pay them?<br />What consultants do you need?<br />What legal form of organisation will you have?<br />What regulations will affect your business?<br />
  169. 169. Financial<br />What is your total expected business income for the year? <br />Quarterly for the next two years? (Forecast)<br />What is your expected monthly cash flow during<br />The year?<br />Have you included a method of paying yourself?<br />What sales volume do you need to <br />make a profit during the three years?<br />What will be the break even point?<br />5 Outstanding (thorough and complete in all areas)<br />4 Very good (most areas covered but could use improvement in detail)<br />3 Good (some areas covered in detail but other areas missing)<br />2 Fair (a few areas covered but very limited detail)<br />1 Poor (no written plans)<br />What are your projected assets, <br />liabilities, net worth?<br />What are your financial needs?<br />What are your funding sources?<br />
  170. 170. Critical Risks<br />What are the potential problems <br />you have identified?<br />Have you calculated the risks?<br />What alternative courses of action<br />Exist?<br />5 Outstanding (thorough and complete in all areas)<br />4 Very good (most areas covered but could use improvement in detail)<br />3 Good (some areas covered in detail but other areas missing)<br />2 Fair (a few areas covered but very limited detail)<br />1 Poor (no written plans)<br />
  171. 171. Harvest Strategy<br />How have you planned for the<br />Orderly transfer of the venture<br />Assets if ownership of the venture is <br />Passed to a corporation?<br />Is there a continuity of business<br />Strategy for orderly transition?<br />5 Outstanding (thorough and complete in all areas)<br />4 Very good (most areas covered but could use improvement in detail)<br />3 Good (some areas covered in detail but other areas missing)<br />2 Fair (a few areas covered but very limited detail)<br />1 Poor (no written plans)<br />
  172. 172. Milestone Schedule<br />How have you set your objectives?<br />Do you have deadlines for each<br />Stage of your growth?<br />5 Outstanding (thorough and complete in all areas)<br />4 Very good (most areas covered but could use improvement in detail)<br />3 Good (some areas covered in detail but other areas missing)<br />2 Fair (a few areas covered but very limited detail)<br />1 Poor (no written plans)<br />
  173. 173. Appendix & Bibliography<br />Have you included any documents<br />Drawings, agreements, or other<br />Materials needed to support<br />The plan?<br />Are there any names of references,<br />Advisors, or technical sources<br />You should include?<br />Are there any other supporting documents?<br />5 Outstanding (thorough and complete in all areas)<br />4 Very good (most areas covered but could use improvement in detail)<br />3 Good (some areas covered in detail but other areas missing)<br />2 Fair (a few areas covered but very limited detail)<br />1 Poor (no written plans)<br />
  174. 174. Summary<br />
  175. 175. Score<br />50 Outstanding (the ideal business plan)<br />45-49 Very Good <br />40-44 Good (the plan is sound with a few areas that need to be refined)<br />35-39 Above Average (this plan has some good areas but needs improvement<br />Before presentation)<br />30-34 Average (some areas covered in detail yet other areas show<br />Weaknesses)<br />20-29 Below average (most areas need greater detail and improvement)<br />Below 20 Poor (plan needs to be researched and documented much better)<br />
  176. 176. Thank You<br />

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