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  • Eg. awards, uniqueness not communicated in a company which was a leader in their space in India. This was to be backed by data etc. Form: Key imp info lost in clutter
  • While some content is the same for all the plans, there may be other material which is specific to a specific reader

Transcript

  • 1. Business Planning: 12 points ‘ to trigger thinking’ Anjana Vivek [email_address] www.bizkul.com
  • 2. BACKGROUND BUSINESS PLANS www.bizkul.com
  • 3. I : A Business Plan is a Communication Tool BUSINESS PLANS www.bizkul.com
  • 4. COMMUNICATION TOOL Both substance and form are important Often , a reader’s perception of your business/idea will be based on the business plan you prepare
  • 5. II : Think about whom are you communicating to BUSINESS PLANS www.bizkul.com
  • 6. COMMUNICATION TOOL Is it - a VC - an angel investor - a strategic investor or - someone else? Each one of these will look at the business plan differently
  • 7. COMMUNICATION TOOL Is it an expert who has some understanding of your business, i.e. such as a technologist or domain expert? Is it someone who is a an expert in some other area without knowledge of your industry?
  • 8. III : Logical structure to the plan BUSINESS PLANS www.bizkul.com
  • 9. STRUCTURE OF THE PLAN The plan must have structure and include the following: - Business / idea - People behind idea/project - Market size expected - Marketing strategy - Competition - Financials - Other information which makes this complete
  • 10. SOME PRACTICAL ASPECTS BUSINESS PLANS www.bizkul.com
  • 11. IV : Projections in new or uncertain markets BUSINESS PLANS www.bizkul.com
  • 12. TARGET MARKET SIZE The markets may be: - new - unexplored - latent - uncertain Think of testing markets or doing market research in creative ways as well as through standard practices
  • 13. V : Financial Projections when the future is unpredictable BUSINESS PLANS www.bizkul.com
  • 14. FORECAST FINANCIALS There are so multiple variables in a business, which impact the financials, including, but not limited to: - revenue streams - costs, capital and revenue in nature - capital infusion at different stages - resource constraints
  • 15. FORECAST FINANCIALS These uncertainties can be factored in to some extent by using the tools of - scenario analysis and - sensitivity analysis
  • 16. VI : Valuation BUSINESS PLANS www.bizkul.com
  • 17. VALUATION Valuation is based on: - intangibles and - tangibles Valuation can be computed in multiple ways, the popular methods: - multiples of revenue; profit etc. - multiples of key drivers, eg.user base - cash flow based
  • 18. VALUATION Valuation may be driven by - the stake the entrepreneur is willing to give up at a particular stage of investment in the business and - the amount of money required by the business at that stage
  • 19. VALUATION Different persons can value the same business differently because they may - use different methods of valuation - use variations in the methods - have different inputs in the methods Thus, valuation perceptions can vary, and we do have situations where there are divergent views on valuation
  • 20. VALUATION Deals can sometimes be structured in such a way that the differences in valuation perception are factored, e.g. linking valuation to performance
  • 21. VALUATION Valuation is also the outcome of negotiations, so it is important to identify one’s bargaining power in relation to the deal issues
  • 22. VII : Protection of Intellectual Property BUSINESS PLANS www.bizkul.com
  • 23. IP PROTECTION If you do not disclose your plan; you cannot expect an investor to evaluate your business idea and fund you If you do disclose this, you may lose the idea to someone else, i.e. there is a chance of your idea being stolen or adapted and misused by someone else What do you do?
  • 24. IP PROTECTION You need to do your homework and background check on the potential investor/partner; i.e. you also need to do a due diligence on them just as they do a due diligence on you If you are looking for investment, at some stage, you will need to disclose much of your idea, so be prepared for this; a VC typically does not sign an NDA
  • 25. Miscellaneous points to think about BUSINESS PLANS www.bizkul.com
  • 26. VIII : Do you disclose weak points ? BUSINESS PLANS www.bizkul.com
  • 27. DISCLOSURE If you do not disclose the negatives, the investor will not automatically assume that you do not have any negatives in your project/idea
  • 28. DISCLOSURE Prepare for due diligence by identifying pitfalls upfront and taking steps to mitigate/de-risk to the extent possible
  • 29. IX : What are the deal drivers BUSINESS PLANS www.bizkul.com
  • 30. DEAL ISSUES Every business has issues which are - deal drivers and - deal breakers Try to identify key deal issues from - your perspective and - the investors perspective
  • 31. DEAL ISSUES This can help you plan on how you can leverage on your strengths This can help in negotiating a better deal
  • 32. X : Roles of team members ? BUSINESS PLANS www.bizkul.com
  • 33. TEAM MEMBERS Plan on roles and responsibilities of team members in terms of execution Plus think through issues of members’ contribution - in money - in kind - in intangibles
  • 34. TEAM MEMBERS Human egos can be fragile and can lead to the break up of the team Recognise this and try to have realistic expectations of yourself and others
  • 35. XI : Getting educated on the basics of managing a business BUSINESS PLANS www.bizkul.com
  • 36. MANAGEMENT & EXECUTION Educate yourself about the basics of managing your business Some things cannot be outsourced
  • 37. XII : Issues of transition to be thought through BUSINESS PLANS www.bizkul.com
  • 38. TRANSITION Look at the stage of your business and plan accordingly Growing to the next level may lead to issues such as - letting go of control - letting go of leadership Are you ready for this?
  • 39. THANK YOU Wishing you all success