Writing Business Plan

Writing Business plan “ You’ve got to be careful if you don’t know where you’re going because you might not get there.” — Yogi Berra

Business plan
By writing this type of plan, you’ll gain a thorough understanding of all aspects of your business.
What Is a Business Plan?
The business plan is your sales tool. Make sure that you know what you are using this tool for and take time to develop it.
A business plan is a written statement that describes and analyzes your business and gives
detailed projections about its future. A business plan also covers the financial aspects of starting or expanding your business—how much money you need and how you’ll pay it back.

Why do You need Business Plan ?
Helps You Get Money
Helps You Decide to Proceed or Stop
Improve Your Business
Order own ideas. Checklist important aspects, Study feasibility,
Gives direction to business development, Reference for operational plans
Reference for results, Be able to react quick on new developments
Internal partners, External partners
Financiers

Business plan
Who
Entrepreneur, team, network
Why
Motivation, objectives
What
Product, services, market
How
Strategy, organisation, finances

What business should I start?
Know Your Business
Be Sure You Like Your Business
My note: I don’t believe any business exists that is so foolproof that anyone can enter and make a sure profit. On the other hand, a skilled, dedicated owner often can make a venture successful when others have failed. Remember, your potential customers will exchange their money only for the conviction that you are giving them their money’s worth. And that means you’ll need to know what you’re doing . While this point should appear obvious, sadly—it isn’t.

TABLE OF CONTENTS
Front page, Executive summary, Table of content
1.Information about entrepreneur
2.Business description
3.Market review
4.Product / service
5. Marketing and selling strategy
6 . Production and supply
7 . Management and organization
8 . Future growth and development
9 . Success and risk factors
10 . Financial plan
11 . Annex

Describe Your Business - Where do you go ?
Motivation: Why are you starting the company?
Vision: What do you see as promising future situation for your company?
Mission: What contribution will your company give to the community / clients
Objectives: Smart
Identify Your Type of Business , Reaching the market
Start to writing step by step

Introduce entrepreneur
Introduce yourself
Motiv ation for start up business
Describe your roll in implementation of the plan
Your specific experience
Experience in entrepreneurship and management

Company Profile
What is company profile?
It is a snapshot of your business and who is involved in it. There include: form of business, owners, business description, location etc.
Basic Questions:
1) What general type of business is this?
2) What is the status of the business? Start-up, expansion or take-over?
3) What is the business form?
4) What are your products?
5) Who are (will be) your customers?

Products or Services
In many cases it is not just a service or a product you are providing but both.
What is it?
Describe every product that You sell . That is your product mix
Describe key characteristics of the product and how it is different of competition ( function, permanence, easy to use , ...)
Describe key characteristics of the service and benefit for costumer
Describe protection of your products/services, patents, copyright and so on

Products or Services
Basic Questions:
1) What products/services are you (will you be) selling?
2) What are the features and benefits of what you sell?
3) What Position do you have (or want to have) in the market?
4) How do your products/services differ from the competition?
5) What makes your products unique and desirable?
6) Why do (will) customers buy from you?

Unique selling points
Offering more costumer value than competing products
Providing specific costumer benefits
Satisfying needs and solving problems
Distinguishing your company from your
Competitors
Why should a potential costumer buy your product rather than that of one of your competitors

Management
This is a description of the people who will provide the expertise required to run your business.
Do!!
Job descriptions, detailed listings and roles and responsibilities!!!!

Marketing
Basic Questions:
Who are the purchasers of your products or type of products?
2) What is the size of the market? Is it growing?
3) What is (will be) your share? How will your share change over time?
4) Are there segments of users who are under-served by competition?
5) Do any of these under-served segments present opportunities? Etc.

Marketing Mix
Product
Price,
Place (distribution), and
Promotion.

Promotional Strategy
What do I include?

Costs
Readership
Target market profile
Distribution coverage
Distribution frequency of the chosen promotional mediums etc.

Place
How will your method of distribution affect:
1. Sales
2. Service
3. Promotion
4. Timing
5. Economics

Pricing
Price is a function of your costs, competition and customers. Your customers must have a desire, willingness and ability to pay for your product or service.
Pricing Strategy
What do I include?
Pricint fot a service: labour, overhead, profit margin
Pricint fot a product: labour, overhead, materials, profit margin
Pricing considerations: Low, medium, high
Client's perception of value

Pricing Strategies
Pricing Strategies
What will be your pricing strategies?
How will you compare with competition and how will they respond?
3) Why will customers pay your price?
4) What will be your credit policies?
5) Is there anything about your business which insulates you from price
competition? etc

Targent marketing and r eaching the market
Before you target you must do reaching the market!!!!
You have described the market, identified your target segment and analysed the competition; now you need to show how you will reach the market.
A target market is a homogeneous group of potential customers that have both a need and a willingness to pay for the business' product or service.
Target include: consumer demographics, psychograpfics , business demographics and psychograpfics etc.

Research
Advice
Be concrete, use annex statistic data, numbers and data sources

Competition
This is a thorough analysis of both direct and indirect competitors.
Your analysis must identify the strengths and weaknesses of the competitors.
Competition research and strategy must include?
YOUR COMPETITION Hours of Operation, Product/Service description, Customer profile , Pricing, Marketing/Advertising, Strengths/weaknesses - why do customers buy from them? Etc.

Competition Fa c tor M y company Strengths Weaknesses Competitor 1 Competitor 2 Importance for customer Product Price Quality Service Selling methods Reputation Advertising Image Location

Basic Questions:
1) Who are (will be) your largest competitors? List them.
2) How will your operation be better (and worse) than your competitors?
3) How are competitors doing? What are their sales and profits?
4) How will competition respond to your market entry?

Selling plan Jan. Feb. Mart April Ma y Jun Total Sold units A Price per unit A Total A Sold units B Price per unit B Total B Total for month

Future Growth and Expansion
How will your business grow in the next year, next 2 years and next 3 years
Staff
Number of clients
Turnover
Other resources
It is important to be able to understand the needs of your business as it grows

Key Success Factors
Listening to the voice of the customer
Building a team working environment
Striving for continuous improvement
Failing to plan means planning to fail
Understanding financial implications of laws and tax regime

Key Risk Factors (swot)
Internal Risks
Inability to create a client base
Sustainability is difficult to achieve in the beginning
Loosing key people of the company
Staff are not skilled
Key positions within the company can not be filled with staff
External Risks Beware of competition – they are watching you very closely Economic instability can affect your business New government regulations could be introduced Sales go down due to low purchasing power

F inancial documents
Basic Questions:
1) What is the total investment required?
2) How will the loan or investment be used?
3) How will the loan or investment make the business more profitable?
4) When will the loan be repaid?

Key documents of Financial plan
Key documents of Financial plan
Break-even Point
Profit & Loss Statement
Balance Sheet
C ash flow

F inancial documents - Cash Flow
It is the actual money that is collected from sales and the actual money that is paid out for expenses on a monthly basis.
A cash flow statement takes the predictions and estimates that you have determined in your business plan and transfers them to a comprehensive financial statement.
What do I include?
SOURCES OF CASH
Sales
Loans
Equity Investments
USES OF CASH
Expenses to be paid
Start-up Costs

F inancial documents - Break-even Analysis
Break even (B/E) analysis is a simple, but very effective financial feasibility test. B/E is used to find
the amount of sales necessary to pay all fixed costs (and have zero income.) In your business plan, it
represents a minimum acceptable performance.
Follow these steps to calculate:
1) Determine Contribution Margin Percent. Contribution Margin (CM) equals Sales minus
Variable Expenses. CM% equals CM dollars divided by Sales. Note: The biggest variable expense is usually Cost of Goods Sold (CGS), which is the direct material and labor necessary to make a product or service ready for sale.
2) List and total all Fixed Expenses for a specific time period (usually one month.) Fixed expenses do not rise or fall with sales volume. Examples: rent, insurance, utilities, etc.
3) Break Even Sales is Fixed Expenses divided by Contribution Margin %.

Breakeven Point – point where Revenues match the Costs and the business has no profit and no losses Break - even p oint n P Price Revenues Variable Cost Fixed Cost Number of Units Sold

F inancial documents - Balance Sheet
The Balance Sheet is the financial statement that reports the assets, liabilities and net worth of a company at a specific point in time. Assets represent the total resources of a company, which may shrink or increase depending on the results of operations. Assets are listed in liquidity order - ease of converting into cash.

F inancial documents Profit & Loss projection
Sell
0 100% Direct costs of working force 0 % Materials costs 0 % Other direct costs 0 % 2) Total costs of sold goods 0 % 3) Bruto Profit (1-2) 0 % Selling and marketing costs 0 % General and administrative costs 0 % 4) Total operational costs 0 % 5) Net operational profit (3-4) 0 % Depreciation 0 % Other revenues 0 % Other costs 0 % Costs of interest fees 0 % 6) Total other revenues/costs 0 % 7) Net profit before taxes (5-6) 0 % 8) Profit tax 0 9) Net profit / loss (7-8) 0 %

F inancial documents - Balance Sheet Assets EUR Liabilities EUR Current assets Current liabilities Cash Debts Accounts receivable A c rual liabilities Inventory Short-term loan Total current assets Part of long-term debt Capital assets Total current liabilities Vehicles Long-term liabilities Total liabilities Office equipment Capital Fabric equipment Land and buildings Privat e c apital Minus : Accumulate depreciation Retained profit Total Capital assets Total capital Total assets Total Liabilities + Capital

Cash flow
The most important financial document
It is your alarm for liquidity
Cash is King!

F inancial documents
Important Appendix :
supporting Documents Historical financial statements, tax returns, resumes, reference letters, personal financial statements, facilities diagrams, letters of intent, purchase orders, contracts

Mistake to avoid
NO Cover Sheet or Table of Contents
Poor organization – follow the outline, don’t rely on business plan software
Poorly researched
Poorly defined customers or competition
Unrealistic assumptions of costs & sales
Inconsistencies, financials must agree with text

Writing Business plan
Conclusion and workshop

GOOD LUCK!!

Q&A

MY CONTACT:
SANDRA JAKOVLJEVIC
E-MAIL: [email_address]
www.sandrajakovljevic.com

Writing Business Plan

by Sandra Jakovljevic on Sep 20, 2009

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