02 prepare business plan

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Is sales plan a part of business plan?

Is sales plan a part of business plan?

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  • 1. Business Plan Preparation: Concepts and TechniquesNov 10, 2012 Business Plan Preparation 1
  • 2. Agenda • Target Audience for Business Plans • Purpose of Business Planning • Preparatory Work • Reader Expectations • Document Structure • Some Tips and Tricks – Common Pitfalls • ReferencesNov 10, 2012 Business Plan Preparation 2
  • 3. Target Audience for Business Plans • VCs / Angel investors • Potential senior employees • Bankers • Accountants • Leasing companiesNov 10, 2012 Business Plan Preparation 3
  • 4. Purpose of Business Planning • Tangibalizing the vague ideas • Quantifying the approximate numbers • Freezing the milestones and deliverables • Estimating the funding requirements • Sizing up the scale of operationsNov 10, 2012 Business Plan Preparation 4
  • 5. Preparatory Work • Information collection • Validation of the assumptions • Analysis and planning • Articulation of your basic value propositionNov 10, 2012 Business Plan Preparation 5
  • 6. What is a financer looking for in a BP? • Basic value proposition • Market size, segmentation, target customers, competitors • Entry barriers, IP protection, Unique Selling Points • Technology expertise and domain knowledge • Alliance and strategic partnerships • Promoters, Board of Directors, Top management (Business Heads, VPs) Nov 10, 2012 Business Plan Preparation 6
  • 7. What is a financer looking for in a BP? • Team (Project management, execution capabilities) • Scalability and growth potential • Marketing and selling plan: channels, distributors, customer acquisition costs • Milestones and deliverables (prototype, proof-of- concept, customers) • Requirement and application of funds: Setting offices, where, how many? • Equity/Capital structure, financing policies (debt/equity ratio) Nov 10, 2012 Business Plan Preparation 7
  • 8. What is a financer looking for in a BP? • Revenue model: Sources of revenue (service/product mix) • Profitability, break even point, growth estimates (revenue, team size) • Risks and contingencies: De-risking/risk management/risk containment plan • Sensitivity analysis • Projected (pro-forma) financial statements • Exit strategy (IPO, equity buyer, strategic buyer, Merger & Acquisition) • Valuation and offer Nov 10, 2012 Business Plan Preparation 8
  • 9. Document Structure 1. Executive summary 2. Introduction / Company overview 3. Concept / Proposition / Product description 4. Market opportunity 5. Competition survey 6. Development plan and milestones 7. Marketing plan 8. Team 9. Financials 10. Offer 11. AppendixNov 10, 2012 Business Plan Preparation 9
  • 10. Some Tips and Tricks• Look for spelling mistakes• Provide a table of contents• Check page number consistency• Do not use too many colours and fonts• Explicitly add confidentiality clause in the beginningNov 10, 2012 Business Plan Preparation 10
  • 11. Common Pitfalls in Business Plans • Too verbose and long • Speak in generalities and management theories • Weak or non-existent financials • Inadequate competitor analysis • Unnecessary details about promoters and their past track record Nov 10, 2012 Business Plan Preparation 11
  • 12. References Venture Finance  http://www.vfinance.com  http://www.nvca.org Small Business Issues  http://www.sba.gov  http://www.startupjournal.com  http://www.bplans.comNov 10, 2012 Business Plan Preparation 12
  • 13. Concluding Remarks• Business plan preparation is a serious process which takes about 2-4 months• The Founder CEO is perpetually writing a business plan (besides doing many other things)• Fund raising itself takes 3-5 months• Business plan must be treated as dynamic document with a potential for continuous and incremental improvementNov 10, 2012 Business Plan Preparation 13