Creating Business Plans Joe Ciccone Cathy Porta NJ SLA October 22, 2002
Agenda <ul><li>Introduction </li></ul><ul><li>Uses of Business Plans </li></ul><ul><li>Components of a Business Plan </li>...
Overview of Business Plans <ul><li>A business plan is a detailed overview of where a business is now, how it is positionin...
Business Plan Uses <ul><li>Test the feasibility of an idea </li></ul><ul><li>Establish and evaluate performance benchmarks...
Business Plan Components <ul><li>Executive Summary </li></ul><ul><li>Business Description </li></ul><ul><li>Market/Industr...
Business Plan Components <ul><li>Executive Summary </li></ul><ul><ul><li>Objectives </li></ul></ul><ul><ul><li>Mission Sta...
Business Plan Components <ul><li>Market/Industry Analysis & Strategies </li></ul><ul><ul><li>Customers </li></ul></ul><ul>...
Business Plan Components <ul><li>Operations </li></ul><ul><ul><li>Outline how you will accomplish production or conduct se...
Business Plan Components <ul><li>Key Management & Ownership </li></ul><ul><ul><li>This section emphasises the management’s...
Business Plan Components <ul><li>Key Management & Ownership </li></ul><ul><ul><li>Identify weaknesses in the team and devi...
Business Plan Components <ul><li>Personnel </li></ul><ul><ul><li>List the staff you will need & their primary duties </li>...
Business Plan Components <ul><li>Funds Required and their Uses </li></ul><ul><ul><li>How much money is required? </li></ul...
Business Plan Components <ul><li>Financial Data </li></ul><ul><ul><li>Important Assumptions </li></ul></ul><ul><ul><li>Key...
Creating a Business Plan for a Library
<ul><ul><ul><li>Phase I:  Establish the Planning Process </li></ul></ul></ul><ul><ul><ul><li>Phase II:  Establish the Orga...
<ul><ul><ul><li>Phase I: Establish the Strategic Planning Process </li></ul></ul></ul><ul><ul><ul><li>- determine the plan...
<ul><ul><ul><li>Phase II: Establish the Organizational Direction </li></ul></ul></ul><ul><ul><ul><li>- review or draft (if...
<ul><ul><ul><li>Phase IIIA:  Conduct Strategic Assessment </li></ul></ul></ul><ul><ul><ul><li>  (assess external environme...
<ul><ul><ul><li>Phase IIIB:   Conduct Strategic Assessment </li></ul></ul></ul><ul><ul><ul><li>  (assess institutional env...
<ul><ul><ul><li>Phase IIIC:  Conduct Strategic Assessment </li></ul></ul></ul><ul><ul><ul><li>    (analyze information obt...
<ul><ul><ul><li>Phase IV: Reassess Strategic Direction </li></ul></ul></ul><ul><ul><ul><li>- identify strategic issues and...
<ul><ul><ul><li>Phase V: Develop Action Plans </li></ul></ul></ul><ul><ul><ul><li>- develop an overarching action plan for...
<ul><ul><ul><li>Phase VI: Write and Communicate the Plan </li></ul></ul></ul><ul><ul><ul><li>- draft the planning document...
<ul><ul><ul><li>Phase VII: Implement the Plan and Monitor Progress </li></ul></ul></ul><ul><ul><ul><li>- implement the pla...
Lessons Learned & Learning <ul><ul><ul><li>Gain management buy-in early and often </li></ul></ul></ul><ul><ul><ul><li>Invo...
QUESTIONS?
Selected  Business Plan References <ul><li>American Express Small Business Services </li></ul><ul><li>Barron’s,  Writing a...
<ul><li>Clement, Richard, ed.,  Strategic planning in ARL libraries: a SPEC kit .  Washington, D.C.: Association of Resear...
<ul><li>Higa-Moore, M.L., et al., “Use of focus groups in a library strategic planning process,”  Journal of Academic Libr...
<ul><li>Nelson, Sandra.  The New planning for results .  Chicago: American Library Association, 2001. </li></ul><ul><li>Ra...
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Creating Business Plans Joe Ciccone

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  • Executive summary is a thumbnail sketch of the business or proposed venture. Purpose is to give the intended reader a advance information of what follows in the plan. Probably best to write it last. Should be brief &amp; to the point &amp; have the audience in mind Business description describes the basic nature and purpose of the business. It explains who and what the business is, what it does, how it is done, who gets it done, where it has been, and where it is expected to go in the future. Business description serves two purposes: it is a gauge by which the entrepreneur measures his or her understanding of the business and the factors that lead to its success or cause its failure. An inability to formulate clear, convincing answers to key questions about the firm is strong evidence that the writer does not fully understand the business and the factors that affect it. It should also meet the expectations of the intended reader.
  • Required for any well-prepared business plan – both internal &amp; external. Provides essential information for the internal planning process, realistic operating, marketing &amp; financial strategies cannot be developed without an understanding of the industry. Primary reason: determine whether a commerically &amp; financially successful industry niche exists: new product or service niche in rapidly growing industry meeting an unfufilled need or unsatisfied market demand lower cost method of doing business better service Market analysis looks at geographic boundaries of market, forces that influence this market (economic, social, competitive, regulatory), target market, sales potential Sales forecasts: national economy, firm’s industry, market or target customer group, the firm &amp; its individual products.
  • Should be included when operations are unique, highly technical or complicated; When operations is critical to firm’s success, When a major change in operations is intended
  • Need to have a clear understanding of the firm’s financing needs and repayment capabilities. Also applies to internal plans. A clear understanding of the risk/return trade-off the financing request represents for the prospective financier (cost-benefit analysis in internal plans). A basic understanding of the nature of the prospective financier’s business.
  • Include financial performance for the past 3-5 years. Detailed enough to provide an understanding of past, progress made, current financial position from which the business plan departs. Key financial indicators should be presented in supporting graphs or tables. Historical financial statements (bs, statement of CF, IS) included in appendix. Financial goals should be detailed, clearly stated, realistic, measureable, &amp; expressed in terms such as financial ratio values, percentage growth rates, percent profit margins, cost &amp; expense relationships
  • Creating Business Plans Joe Ciccone

    1. 1. Creating Business Plans Joe Ciccone Cathy Porta NJ SLA October 22, 2002
    2. 2. Agenda <ul><li>Introduction </li></ul><ul><li>Uses of Business Plans </li></ul><ul><li>Components of a Business Plan </li></ul><ul><li>Creating a Business Plan for a Library </li></ul><ul><li>Lessons Learned </li></ul><ul><li>Questions </li></ul><ul><li>Selected Business Plan References </li></ul>
    3. 3. Overview of Business Plans <ul><li>A business plan is a detailed overview of where a business is now, how it is positioning itself, where it wants to go, and how it is going to achieve its goals. </li></ul><ul><li>It is a blueprint of an organization’s past, present, and future. </li></ul><ul><li>A business plan is critical to the success of any venture and is an indispensable management tool that can be used in a variety of situations. </li></ul>
    4. 4. Business Plan Uses <ul><li>Test the feasibility of an idea </li></ul><ul><li>Establish and evaluate performance benchmarks </li></ul><ul><li>Communication </li></ul><ul><ul><li>Prospective investors </li></ul></ul><ul><ul><li>Lenders and financial institutions </li></ul></ul><ul><ul><li>Employees </li></ul></ul><ul><ul><li>Outside advisors </li></ul></ul><ul><ul><li>Customers, suppliers, etc. </li></ul></ul>
    5. 5. Business Plan Components <ul><li>Executive Summary </li></ul><ul><li>Business Description </li></ul><ul><li>Market/Industry Analysis & Strategies </li></ul><ul><li>Competition & Feasibility Study </li></ul><ul><li>Operations </li></ul><ul><li>Key Management People & Ownership </li></ul><ul><li>Personnel </li></ul><ul><li>Funds Required and their Uses </li></ul><ul><li>Financial Data </li></ul>
    6. 6. Business Plan Components <ul><li>Executive Summary </li></ul><ul><ul><li>Objectives </li></ul></ul><ul><ul><li>Mission Statement </li></ul></ul><ul><ul><li>Key Success Measures </li></ul></ul><ul><li>Business Description </li></ul><ul><ul><li>An Overview of the Industry </li></ul></ul><ul><ul><li>Description of Company/Department </li></ul></ul><ul><ul><li>Products/Services </li></ul></ul><ul><ul><li>Positioning </li></ul></ul><ul><ul><li>Pricing Strategy </li></ul></ul>
    7. 7. Business Plan Components <ul><li>Market/Industry Analysis & Strategies </li></ul><ul><ul><li>Customers </li></ul></ul><ul><ul><li>Market Size & Trends </li></ul></ul><ul><ul><li>Estimated Sales </li></ul></ul><ul><ul><li>Future Outlook </li></ul></ul><ul><ul><li>Strategic Opportunity </li></ul></ul><ul><li>Competition and Feasibility Study </li></ul><ul><ul><li>Who are your competitors </li></ul></ul><ul><ul><li>Differentiation </li></ul></ul><ul><ul><li>SWOT </li></ul></ul>
    8. 8. Business Plan Components <ul><li>Operations </li></ul><ul><ul><li>Outline how you will accomplish production or conduct service operations </li></ul></ul><ul><ul><li>Identify firm location </li></ul></ul><ul><ul><li>Explore operating procedures </li></ul></ul><ul><ul><li>Describe operating facilities and layout </li></ul></ul><ul><ul><li>Describe purchasing procedures </li></ul></ul><ul><ul><li>Explain inventory management procedures </li></ul></ul><ul><ul><li>Explain customer service & quality control procedures </li></ul></ul>
    9. 9. Business Plan Components <ul><li>Key Management & Ownership </li></ul><ul><ul><li>This section emphasises the management’s talent & skills indicating why they contribute to the distinctive competence of the business. Should include: </li></ul></ul><ul><ul><ul><li>Name </li></ul></ul></ul><ul><ul><ul><li>Qualifications </li></ul></ul></ul><ul><ul><ul><li>Skills/Experience </li></ul></ul></ul><ul><ul><ul><li>Primary Role </li></ul></ul></ul><ul><ul><ul><li>Track Record </li></ul></ul></ul>
    10. 10. Business Plan Components <ul><li>Key Management & Ownership </li></ul><ul><ul><li>Identify weaknesses in the team and devise strategies to overcome them </li></ul></ul><ul><ul><li>Describe how you intend to attract & compensate key people </li></ul></ul><ul><ul><li>List the board of directors </li></ul></ul><ul><ul><li>List the current shareholders </li></ul></ul><ul><ul><li>Define the legal structure of the business </li></ul></ul>
    11. 11. Business Plan Components <ul><li>Personnel </li></ul><ul><ul><li>List the staff you will need & their primary duties </li></ul></ul><ul><ul><li>Explain the reward and compensation method </li></ul></ul><ul><ul><li>Outline the recruiting & training methods </li></ul></ul><ul><ul><li>Show sample organizational structure </li></ul></ul><ul><ul><li>Provide details of staff turnover such as average length of employment and staff involvement in management issues </li></ul></ul><ul><ul><li>Provide details of union membership or any enterprise agreements with staff </li></ul></ul>
    12. 12. Business Plan Components <ul><li>Funds Required and their Uses </li></ul><ul><ul><li>How much money is required? </li></ul></ul><ul><ul><li>Any actions taken already to secure financing? </li></ul></ul><ul><ul><li>How much will be required in the next 3 years? </li></ul></ul><ul><ul><li>Describe funding sources and terms </li></ul></ul><ul><ul><li>How will these funds be used? </li></ul></ul><ul><ul><li>Outline the overall funding strategy </li></ul></ul>
    13. 13. Business Plan Components <ul><li>Financial Data </li></ul><ul><ul><li>Important Assumptions </li></ul></ul><ul><ul><li>Key Financial Indicators </li></ul></ul><ul><ul><li>Break-Even Analysis </li></ul></ul><ul><ul><li>Projected Profit and Loss </li></ul></ul><ul><ul><li>Projected Cash Flow </li></ul></ul><ul><ul><li>Projected Balance Sheet </li></ul></ul><ul><ul><li>Projected Income Statement </li></ul></ul>
    14. 14. Creating a Business Plan for a Library
    15. 15. <ul><ul><ul><li>Phase I: Establish the Planning Process </li></ul></ul></ul><ul><ul><ul><li>Phase II: Establish the Organizational Direction </li></ul></ul></ul><ul><ul><ul><li>Phase III: Conduct the Strategic Assessment </li></ul></ul></ul><ul><ul><ul><li>Phase IV: Reassess the Strategic Direction </li></ul></ul></ul><ul><ul><ul><li>Phase V: Develop Action Plans </li></ul></ul></ul><ul><ul><ul><li>Phase VI: Write and Communicate the Plan </li></ul></ul></ul><ul><ul><ul><li>Phase VII: Implement the Plan and Monitor Its Progress </li></ul></ul></ul>Planning Process Phases
    16. 16. <ul><ul><ul><li>Phase I: Establish the Strategic Planning Process </li></ul></ul></ul><ul><ul><ul><li>- determine the planning goals </li></ul></ul></ul><ul><ul><ul><li>- determine the planning milestones & budget </li></ul></ul></ul><ul><ul><ul><li>- establish the steering committee </li></ul></ul></ul>Planning Process Phases
    17. 17. <ul><ul><ul><li>Phase II: Establish the Organizational Direction </li></ul></ul></ul><ul><ul><ul><li>- review or draft (if ones do not already exist) vision, mission </li></ul></ul></ul><ul><ul><ul><li>and values statement(s) </li></ul></ul></ul>Planning Process Phases
    18. 18. <ul><ul><ul><li>Phase IIIA: Conduct Strategic Assessment </li></ul></ul></ul><ul><ul><ul><li> (assess external environment) </li></ul></ul></ul><ul><ul><ul><ul><li>- develop survey mechanism </li></ul></ul></ul></ul><ul><ul><ul><ul><li>- identify & interview other corporate archivists </li></ul></ul></ul></ul>Planning Process Phases
    19. 19. <ul><ul><ul><li>Phase IIIB: Conduct Strategic Assessment </li></ul></ul></ul><ul><ul><ul><li> (assess institutional environment) </li></ul></ul></ul><ul><ul><ul><li>- for each stakeholder group determine what method to use to </li></ul></ul></ul><ul><ul><ul><li>obtain feedback (e.g., in-person interview, survey, etc.) </li></ul></ul></ul><ul><ul><ul><li>- develop the feedback mechanism(s) </li></ul></ul></ul><ul><ul><ul><li>- identify & interview or survey representatives of each </li></ul></ul></ul><ul><ul><ul><li>stakeholder group </li></ul></ul></ul>Planning Process Phases
    20. 20. <ul><ul><ul><li>Phase IIIC: Conduct Strategic Assessment </li></ul></ul></ul><ul><ul><ul><li> (analyze information obtained) </li></ul></ul></ul><ul><ul><ul><li>- analyze information obtained to determine strengths, </li></ul></ul></ul><ul><ul><ul><li>weaknesses, opportunities and threats </li></ul></ul></ul>Planning Process Phases
    21. 21. <ul><ul><ul><li>Phase IV: Reassess Strategic Direction </li></ul></ul></ul><ul><ul><ul><li>- identify strategic issues and clarify strategic goals </li></ul></ul></ul><ul><ul><ul><li>- review and update the vision, mission and values statements </li></ul></ul></ul><ul><ul><ul><li>- develop objectives for each strategic goal </li></ul></ul></ul>Planning Process Phases
    22. 22. <ul><ul><ul><li>Phase V: Develop Action Plans </li></ul></ul></ul><ul><ul><ul><li>- develop an overarching action plan for each strategic goal </li></ul></ul></ul><ul><ul><ul><li>- develop work plans for each objective </li></ul></ul></ul>Planning Process Phases
    23. 23. <ul><ul><ul><li>Phase VI: Write and Communicate the Plan </li></ul></ul></ul><ul><ul><ul><li>- draft the planning document </li></ul></ul></ul><ul><ul><ul><li>- draft the strategy to communicate the plan to stakeholder groups </li></ul></ul></ul><ul><ul><ul><li>- begin to inform the stakeholders about the plan </li></ul></ul></ul>Planning Process Phases
    24. 24. <ul><ul><ul><li>Phase VII: Implement the Plan and Monitor Progress </li></ul></ul></ul><ul><ul><ul><li>- implement the plan </li></ul></ul></ul><ul><ul><ul><li>- periodically review the plan and report to management on your </li></ul></ul></ul><ul><ul><ul><li>progress </li></ul></ul></ul>Planning Process Phases
    25. 25. Lessons Learned & Learning <ul><ul><ul><li>Gain management buy-in early and often </li></ul></ul></ul><ul><ul><ul><li>Involve stakeholder groups in the planning </li></ul></ul></ul><ul><ul><ul><li>Don’t underestimate the amount of time the planning will take </li></ul></ul></ul>
    26. 26. QUESTIONS?
    27. 27. Selected Business Plan References <ul><li>American Express Small Business Services </li></ul><ul><li>Barron’s, Writing a Convincing Business Plan </li></ul><ul><li>Business Plan Software & Sample Plans, www. bplans .com </li></ul><ul><li>Ernst & Young, “How to Prepare a Business Plan” </li></ul><ul><li>Small Business Administration, www. sba . gov </li></ul>
    28. 28. <ul><li>Clement, Richard, ed., Strategic planning in ARL libraries: a SPEC kit . Washington, D.C.: Association of Research Libraries, 1995. </li></ul><ul><li>Corrall, Sheila. Strategic planning for library and information services . London: Aslib, ____. </li></ul><ul><li>Dissmeyer, A., “Developing an intelligence audit to drive strategic planning: a case study,” Trends in Law Library Management & Technology , 12(3) December 2001, pp. 5-8. </li></ul><ul><li>Hannabuss, S., “Scenario planning for libraries,” Library Management , 22 (4/5) 2001, pp. 168-76. </li></ul>
    29. 29. <ul><li>Higa-Moore, M.L., et al., “Use of focus groups in a library strategic planning process,” Journal of Academic Librarianship , 27(5) September 2001, p. 372-8. </li></ul><ul><li>Johnston, J.L., “Paying for the future: financial planning as part of the strategic plan,” Trends in Law Library Management & Technology , 12(3) December 2001, pp. 1-2. </li></ul><ul><li>McClamroch, J., et al., “Strategic planning: politics, leadership & learning,” Journal of the Medical Library Association , 90(1) January 2002, pp. 86-92. </li></ul>
    30. 30. <ul><li>Nelson, Sandra. The New planning for results . Chicago: American Library Association, 2001. </li></ul><ul><li>Randolph, Susan E., “The Search conference,” Library Administration & Management , 15(4) Fall 2001, p. 230-9. </li></ul><ul><li>Shoaf, Eric C., “Fifteen months in the planning trenches: strategically positioning the research library for a new century,” Library Administration & Management , 15(1) Winter 2001, pp. 4-13. </li></ul>
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